{"id":567961,"date":"2026-08-21T16:26:52","date_gmt":"2026-08-21T20:26:52","guid":{"rendered":"https:\/\/allianceadvisors.com\/modernizing-shareholder-communication\/"},"modified":"2026-08-24T11:03:14","modified_gmt":"2026-08-24T15:03:14","slug":"modernizing-shareholder-communication","status":"publish","type":"post","link":"https:\/\/allianceadvisors.com\/ja\/modernizing-shareholder-communication\/","title":{"rendered":"Modernizing Shareholder Communication &#8211; A Policy Review of the OBO\/NOBO Framework in U.S. Public Markets. May 2026"},"content":{"rendered":"<div class=\"wpb-content-wrapper\">[vc_row css_animation=&rdquo;fadeIn&rdquo; content_placement=&rdquo;bottom&rdquo; column_spacing=&rdquo;0px&rdquo; wpex_bg_image_source=&rdquo;featured&rdquo; css=&rdquo;.vc_custom_1740765101116{background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;}&rdquo; min_height=&rdquo;450px&rdquo;][vc_column wpex_bg_image_source=&rdquo;featured&rdquo; css=&rdquo;.vc_custom_1738695614909{background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;}&rdquo; wpex_bg_position=&rdquo;center center&rdquo;]<div class=\"vcex-spacing wpex-w-100 wpex-clear\" style=\"height:300px;\"><\/div><style>.vcex-heading.vcex_6a8cbd5d65bfb{width:600px;color:var(--wpex-accent);font-size:var(--wpex-text-4xl);font-weight:600;line-height:var(--wpex-leading-tight);}@media (max-width:479px){.vcex-heading.vcex_6a8cbd5d65bfb{font-size:30px;}}<\/style><h1 class=\"vcex-heading vcex-heading-plain vcex-module wpex-heading wpex-text-2xl wpex-max-w-100 wpex-mr-auto vc_custom_1787583691125 vcex_6a8cbd5d65bfb\"><span class=\"vcex-heading-inner wpex-inline-block\">Modernizing Shareholder Communication &ndash; A Policy Review of the OBO\/NOBO Framework in U.S. Public Markets. May 2026<\/span><\/h1><style>.vcex-heading.vcex_6a8cbd5d6657b{width:600px;color:var(--wpex-accent);font-size:var(--wpex-text-lg);font-weight:600;line-height:var(--wpex-leading-tight);}@media (max-width:479px){.vcex-heading.vcex_6a8cbd5d6657b{font-size:16px;}}<\/style><h3 class=\"vcex-heading vcex-heading-plain vcex-module wpex-text-balance wpex-heading wpex-text-2xl wpex-max-w-100 wpex-mr-auto vc_custom_1775745578338 vcex_6a8cbd5d6657b\"><a href=\"https:\/\/allianceadvisors.com\/ja\/author\/sam\/\" class=\"wpex-no-underline wpex-inherit-color-important\"><span class=\"vcex-heading-inner wpex-inline-block\"><span class=\"vcex-heading-icon vcex-heading-icon-left vcex-icon-wrap wpex-mr-5\">By<\/span>Sam Chandoha<\/span><\/a><\/h3><div class=\"vcex-spacing wpex-w-100 wpex-clear\" style=\"height:50px;\"><\/div>[\/vc_column][\/vc_row][vc_row][vc_column]<div class=\"vcex-spacing wpex-w-100 wpex-clear\" style=\"height:15px;\"><\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=&rdquo;&rdquo;]\n<h2>Introduction<\/h2>\n<p><span class=\"wpex-text-lg\">Transparency is a foundational value of the United States that is embedded in our democratic institutions, our legal system, our economic freedoms, and our financial markets. It is a principle that has long guided markets regulation and is central to the mission of the U.S. Securities and Exchange Commission (&ldquo;SEC&rdquo;). Closely intertwined with transparency is an equally fundamental premise of U.S. capital markets&mdash;that owners maintain their property better than anyone else. Markets function best when ownership is visible and when investors are able to act as engaged, informed, and accountable owners.<\/span><\/p>\n<p>For decades, the SEC rules governing investor ownership disclosure have reflected these two core priorities. The registration and reporting framework ensures that large mutual fund investors are disclosed, supporting market integrity and informed decision-making. Supplemental rules governing <a class=\"glossaryLink cmtt_Proxy Solicitation\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Proxy Voting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The process by which shareholders cast their votes on corporate matters by proxy, rather than...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/german-shareholder-meeting-review\/&amp;quot;&gt;2023 German shareholder meeting season review&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/annual-equity-plan-replenishments\/&amp;quot;&gt;Navigating Annual Consecutive Equity Plan Replenishments: Data Insights and a Handy Checklist for Companies&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-voting\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-voting\/\"  href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-voting\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>proxy voting<\/a>, shareholder communications, and the exercise of ownership rights are likewise grounded in the same principles of facilitating transparency while enabling investors to participate meaningfully in <a class=\"glossaryLink cmtt_Corporate Governance Advisory\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Corporate Governance&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The system of rules, practices, processes, and structures by which a company is directed and...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/%e3%82%a4%e3%83%b3%e3%83%93%e3%82%af%e3%82%bf%e3%82%b9\/&amp;quot;&gt;&#12452;&#12531;&#12532;&#12451;&#12463;&#12479;&#12473;&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/german-shareholder-meeting-review\/&amp;quot;&gt;2023 German shareholder meeting season review&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/corporate-governance\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/corporate-governance\/\" href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/corporate-governance\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">corporate governance<\/a>.<\/p>\n<p>These rules have also extended to retail investors. Most retail shareholders are given the option to allow companies to communicate with them directly, a status known as Non-Objecting <a class=\"glossaryLink cmtt_Proxy Solicitation cmtt_NOBOs &amp; OBOs cmtt_Street Name Shareholder\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Beneficial Owner&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Beneficial Owner is the person or entity that enjoys the benefits of ownership of a security,...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/retail-engagement-digital-tools\/&amp;quot;&gt;Retail Engagement &amp;#8211; Digital Tools&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/2026-us-proxy-season-rule-14a-8-in-practice-texas-in-ascendance\/&amp;quot;&gt;2026 US Proxy Season &ndash; Rule 14a 8 in Practice, Texas in Ascendance&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/beneficial-owner\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/beneficial-owner\/\"  href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/beneficial-owner\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>Beneficial Owner<\/a> (&ldquo;NOBO&rdquo;). The majority of retail investors choose this option, reinforcing the norm that transparency and direct issuer-owner communication is beneficial to both companies and shareholders. When these rules were first adopted decades ago, however, a narrow exception was created. A small number of investors holding a very limited number of shares were permitted to remain invisible to their portfolio companies by electing Objecting Beneficial Owner (&ldquo;OBO&rdquo;) status, even though this opacity runs counter to the twin market values of transparency and active ownership. At the time, this exception was viewed as tolerable for several reasons.<\/p>\n<p>First, OBO holders were considered de minimis in both number and economic significance, such that their invisibility was not thought to meaningfully affect issuers or the broader market. Second, the rules were adopted in a paper-based era, when administrative burdens and privacy concerns for brokers were materially greater, and some accommodation was viewed as appropriate. Third, issuer communication with retail shareholders was itself impractical and costly, meaning that the loss of contact with a small subset of investors was not seen as consequential. Fourth, proxy voting by retail investors was relatively rare and generally passive, making the inability to communicate with some shareholders less significant. Finally, at the time the current framework was adopted in 1986, there was limited understanding of how opaque ownership and communication systems could enable errors in proxy vote tabulation to go undetected.<\/p>\n<p>In the decades since, experience has demonstrated that opacity in the proxy plumbing system can, and has, contributed to inaccurate outcomes, including under and overvoting, reconciliation failures, and other distortions that are difficult to identify or correct without transparency. These issues were not well understood when the OBO exception was created, but they have since become increasingly evident. Thus, even though permitting OBO status was inconsistent with the SEC&rsquo;s core commitment to transparency and with the capital markets&rsquo; foundational assumption that owners should be able to fully exercise their ownership, its limited scope in a paper-based, low-engagement, &ldquo;Wall Street Walk&rdquo; era allowed it to persist. The rationale for that tolerance, however, rested entirely on conditions that no longer exist.<\/p>\n<h2>Background on the OBO Classification<\/h2>\n<p>As noted, the conditions that once allowed the OBO exception to persist have changed rapidly and fundamentally. What was once a narrow, largely inconsequential departure from the norm of transparency has become a material and growing threat to effective ownership, and market integrity. As a result, there is now a clear urgency to revisit and modernize rules that no longer reflect how today&rsquo;s markets function. Most notably, retail holdings subject to OBO and NOBO classifications have expanded dramatically in both number and economic significance. The growth in retail participation means that opaque ownership is no longer a marginal feature of the system, but a meaningful impediment to transparency and to the ability of owners to act like owners. What was once a de minimis exception has evolved into a structural issue with real consequences for issuers, investors, and the proxy process.<\/p>\n<p>At the same time, the technological and operational constraints that once supported limited issuer&ndash;<a class=\"glossaryLink cmtt_Retail Shareholder Solicitation\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Retail Shareholder&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Retail Shareholder are Individual investors who own shares of a company&amp;#039;s stock.. Retail...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/south-korean-consumer-products-company\/&amp;quot;&gt;Case Study: Activism&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/annual-equity-plan-replenishments\/&amp;quot;&gt;Navigating Annual Consecutive Equity Plan Replenishments: Data Insights and a Handy Checklist for Companies&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/retail-shareholder\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/retail-shareholder\/\" href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/retail-shareholder\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">retail shareholder<\/a> communication have largely disappeared. The market has migrated decisively from paper-based systems to digital, platform-based communications. Today, it is practical for issuers to identify, learn from, and communicate directly with shareholders of all sizes. This shift is evidenced by the rapid growth of commission-free trading platforms, the adoption of digital shareholder-engagement tools such as Robinhood&rsquo;s Say Technologies, and the replication by other issuers of models pioneered by companies like ExxonMobil that allow retail investors to make informed, affirmative communication choices.<\/p>\n<p>There has also been a broader recognition that all investors, not only large institutional holders, deserve a meaningful voice in corporate governance. This recognition strengthens the case for enabling direct issuer-owner communication, particularly at a time when foreign ownership of U.S. companies continues to rise and raises national security, economic resilience, and governance considerations. Ensuring that all shareholders are visible, reachable, and engaged has taken on increased importance in this context. Just as brokers and banks are required to know their customers, publicly traded companies should have the right to know who owns their company.<\/p>\n<p>In parallel, proxy voting itself has become far more consequential than when the current rules were adopted. Votes on director elections, <a class=\"glossaryLink cmtt_Executive Compensation cmtt_&ldquo;Say on Pay&rdquo; provisions\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Executive Compensation&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Executive compensation is the financial compensation and benefits package provided to top-level...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/german-shareholder-meeting-review\/&amp;quot;&gt;2023 German shareholder meeting season review&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/south-korean-consumer-products-company\/&amp;quot;&gt;Case Study: Activism&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/executive-compensation\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/executive-compensation\/\" href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/executive-compensation\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">executive compensation<\/a>, and major transactions now routinely hinge on relatively narrow margins, making issuers&rsquo; ability to reach and inform their shareholders materially more important than in earlier eras. Opaque ownership and indirect communication structures undermine that ability at precisely the moment when it matters most. Compounding these challenges is the growth of other sources of opacity within the proxy system, including pass-through voting mechanisms and the decline of benchmark reconciliation reports. Together, these developments further limit visibility into who is voting, how votes are cast, and whether outcomes accurately reflect investor intent. In this environment, transparency should be strengthened wherever possible, not treated as optional. Finally, investors who place a premium on privacy now have alternative means to preserve anonymity without imposing system-wide costs. The widespread availability of holding companies and similar structures allows investors to shield their identities where appropriate, without requiring the regulatory framework itself to create opacity that affects all market participants. As a result, modernizing OBO rules would not disadvantage privacy-seeking investors, but would instead reduce the broad-based harm that the current regime imposes on issuers and other shareholders.<\/p>\n<p>Taken together, these developments make clear that the historical rationale for the OBO exception no longer applies. What once may have been a tolerable accommodation in a paper-based, low-engagement era has become increasingly misaligned with modern market realities&mdash;and with the SEC&rsquo;s longstanding commitment to transparency and effective ownership.<\/p>\n<h2>The Market&rsquo;s Development Since The 1980s<\/h2>\n<p>The shareholder landscape in 2026 is unrecognizable from the one that existed when the OBO\/NOBO rules were written. The proliferation of low-cost brokerage platforms, the democratization of retail investing, and the explosive growth of exchange-traded funds have produced a seismic shift in the number of shareholder accounts in the U.S.<\/p>\n<div id=\"footable_parent_567937\" class=\"ninja-footable-loader footable_parent ninja_table_wrapper loading_ninja_table wp_table_data_press_parent semantic_ui colored_table\">\n                    <h3 class=\"table_title footable_title\">Exhibit 1: Estimated Brokerage Accounts by Decade (Top 10 Largest Brokers):<\/h3>\n                        <table data-ninja_table_instance=\"ninja_table_instance_0\" data-footable_id=\"567937\" data-filter-delay=\"1000\" aria-label=\"Exhibit 1: Estimated Brokerage Accounts by Decade (Top 10 Largest Brokers):\" id=\"footable_567937\" data-unique_identifier=\"ninja_table_unique_id_1608051491_567937\" class=\" foo-table ninja_footable foo_table_567937 ninja_table_unique_id_1608051491_567937 ui table  ninja_search_right nt_type_legacy_table celled striped vertical_centered ninja_custom_color inverted footable-paging-right ninja_table_search_disabled ninja_table_pro\">\n                <colgroup>\n                            <col class=\"ninja_column_0 \">\n                            <col class=\"ninja_column_1 \">\n                    <\/colgroup>\n        <thead>\n<tr class=\"footable-header\">\n                                        <th scope=\"col\" class=\"ninja_column_0 ninja_clmn_nm_year \">Year<\/th><th scope=\"col\" class=\"ninja_column_1 ninja_clmn_nm_total_client_accounts \">Total Client Accounts<\/th><\/tr>\n<\/thead>\n<tbody>\n\n        <tr data-row_id=\"1001746\" class=\"ninja_table_row_0 nt_row_id_1001746\">\n            <td>1985<\/td><td>11,500,000<\/td>        <\/tr>\n            <tr data-row_id=\"1001747\" class=\"ninja_table_row_1 nt_row_id_1001747\">\n            <td>1995<\/td><td>27,200,000<\/td>        <\/tr>\n            <tr data-row_id=\"1001748\" class=\"ninja_table_row_2 nt_row_id_1001748\">\n            <td>2005<\/td><td>72,500,000<\/td>        <\/tr>\n            <tr data-row_id=\"1001749\" class=\"ninja_table_row_3 nt_row_id_1001749\">\n            <td>2015<\/td><td>82,600,000<\/td>        <\/tr>\n            <tr data-row_id=\"1001750\" class=\"ninja_table_row_4 nt_row_id_1001750\">\n            <td>2025<\/td><td>160,000,000<\/td>        <\/tr>\n    <\/tbody><!--ninja_tobody_rendering_done-->\n    <\/table>\n    \n    \n    \n<\/div>\n\n<p>Just looking at Robinhood data alone, in 2016, the firm had an estimated one million funded accounts and in the latest quarter they reported 27.4 million, a twenty-seven-fold increase<sup>1<\/sup>. Estimating the average number of holdings per brokerage account across the industry is difficult, but according to Charles Schwab, the average number of positions in self-directed accounts within the Schwab system is twelve across six categories of investment. Using only equities, the number is six which means that the number of holdings in brokerage accounts has grown from an estimated 69 million in 1985 to approximately 960 million in 2025, without counting mutual funds or ETF&rsquo;s<sup>2<\/sup>. This represents a fourteen-fold increase in the number of discrete shareholder-to-company relationships that the proxy communication system must serve. The cost and complexity implications are staggering, and they are borne overwhelmingly by issuers and, ultimately, their shareholders.<\/p>\n<p>The explosion in share ownership is precisely the kind of structural change that demands a reassessment of the regulatory framework. The economic analysis that supported the OBO\/NOBO classification in the 1980s simply did not and could not have contemplated a market with over 160 million brokerage accounts and nearly a billion shareholder positions. The costs that the framework imposes, which are driven by the number of shareholder accounts, not the number of shares, have scaled in ways that render the original cost-benefit analysis conducted at the time obsolete.<\/p>\n<h2>Costs &amp; inefficiencies associated with current OBO\/NOBO framework<\/h2>\n<p><strong>A. Governance Costs &amp; Inefficiencies<\/strong><\/p>\n<p>The financial burden of operating within the OBO\/NOBO framework is significant, and it falls most heavily on the companies that can least afford it. <a class=\"glossaryLink cmtt_Proxy Solicitation\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Proxy solicitation&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Proxy solicitation is the process of a company seeking votes from its shareholders on corporate...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/south-korean-consumer-products-company\/&amp;quot;&gt;Case Study: Activism&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/annual-equity-plan-replenishments\/&amp;quot;&gt;Navigating Annual Consecutive Equity Plan Replenishments: Data Insights and a Handy Checklist for Companies&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-solicitation\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-solicitation\/\" href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-solicitation\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Proxy solicitation<\/a> and shareholder outreach are materially more costly when a substantial portion of the shareholder base is hidden behind the OBO classification. Because issuers cannot identify or contact OBO shareholders directly, they must rely on indirect, intermediary-driven channels of communication. This process is costly, time-consuming, fragmented, and structurally biased toward the interests of intermediaries rather than issuers and their shareholders.<\/p>\n<p>These costs are fixed and do not scale with market capitalization, which means they disproportionately impact small and mid-sized companies. For a large-cap company, proxy solicitation may be significant but are manageable relative to its overall operating budget. For a small-cap or micro-cap company, however, these same costs can represent a meaningful percentage of operating expenses and can be the decisive factor in whether the company pursues a particular shareholder vote or forgoes it entirely.<\/p>\n<p>Appendix A illustrates the scale of the problem. In a random sample of 70 publicly traded companies across multiple market capitalization and industry sectors, 56% of all shareholder accounts were classified as NOBO, yet these accounts held only 31% of the outstanding shares, meaning the remaining 44% of accounts (the OBOs) control a disproportionate 68% of the shares, yet are entirely invisible to company management<sup>3<\/sup>. Solicitation costs are driven by accounts, not shares. This asymmetry was not a factor in the economic analysis underlying the original rule because, when the rules were promulgated in the 1980s, the shareholder base was a fraction of what it is today<sup>4<\/sup>.<\/p>\n<p>A recent proxy solicitation example illustrates the scale of the problem in stark terms. About a year after going public, a technology infrastructure company sought to reach shareholders to approve an increase in authorized shares. The company employed Alliance Advisors to assist in soliciting a shareholder vote. In just eight months as a publicly traded company, the company had already accumulated over 422,000 shareholder accounts. While 85% of those shareholder accounts were classified as NOBO, those accounts only represented 55% of the outstanding shares. To have a realistic chance at delivering a majority vote on a critical proposal, an aggressive solicitation campaign targeting every reachable NOBO account was necessary. While ultimately successful in securing sufficient shareholder votes, the total costs for the company exceeded $20 million. Notably, this is not an outlier anecdote. Cases like this are occurring with increasing frequency as retail share ownership continues to expand across low-cost brokerage platforms.<\/p>\n<p>The mutual fund and exchange-traded fund (&ldquo;ETF&rdquo;) industry faces an analogous challenge. In a thirty-five-fund sample of open-ended funds, while 58% of accounts were classified as NOBO, those accounts only held 53% of the outstanding shares<sup>5<\/sup>. Moreover, in a fifteen-fund sample of ETFs and money market funds, 59% of accounts were NOBO, holding 54% of shares. Because mutual funds and ETF shareholders are overwhelmingly retail investors, the costs of soliciting proxies from the hidden OBO segment are particularly acute, and those costs are ultimately passed on to the very retail investors who the regulatory system is ostensibly designed to protect<sup>6<\/sup>.<\/p>\n<p>Because companies do not have access to the OBOs, which account for 68% of outstanding shares, on average, solicitation is focused on NOBOs or small accounts that would otherwise not be actively solicited. This &ldquo;over solicitation&rdquo; means that the <a class=\"glossaryLink cmtt_Proxy Solicitor\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Proxy Solicitor&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; A specialized firm retained by a company or shareholder to assist in the solicitation of...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/south-korean-consumer-products-company\/&amp;quot;&gt;Case Study: Activism&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/annual-equity-plan-replenishments\/&amp;quot;&gt;Navigating Annual Consecutive Equity Plan Replenishments: Data Insights and a Handy Checklist for Companies&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-solicitor\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-solicitor\/\"  href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/proxy-solicitor\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>proxy solicitor<\/a> must contact six accounts to achieve the same result that contacting one OBO account would produce. This results in unavoidable and outsized solicitation costs. As an example, a mutual fund family with three million shareholders would have to budget between $10 to $20 million for an across-the-board solicitation. Eliminating the OBO classification would make proxy solicitation more efficient and would, in turn, substantially reduce the costs of holding important shareholder meetings.<\/p>\n<p><strong>B. Governance Fragmentation &amp; Uncertainty<\/strong><\/p>\n<p>Beyond the direct cost burden, the OBO classification introduces a pervasive element of uncertainty into the corporate governance process. When a company cannot identify a meaningful segment of its shareholder base, strategic decision-making becomes an exercise in incomplete information. Management teams and boards are forced to design engagement strategies, evaluate vote projections, and make consequential business decisions without knowing who owns a significant portion of their company. This information asymmetry creates several downstream problems:<\/p>\n<ol>\n<li>Companies may avoid pursuing strategic votes, such as approvals for financing transactions, by-law amendments, or significant <a class=\"glossaryLink cmtt_Custodian\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Corporate Actions&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Corporate actions are any actions taken by a company that have a significant impact on its...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/retail-engagement-digital-tools\/&amp;quot;&gt;Retail Engagement &amp;#8211; Digital Tools&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/2026-us-proxy-season-rule-14a-8-in-practice-texas-in-ascendance\/&amp;quot;&gt;2026 US Proxy Season &ndash; Rule 14a 8 in Practice, Texas in Ascendance&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/corporate-actions\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/corporate-actions\/\" href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/corporate-actions\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">corporate actions<\/a>, because they cannot reliably predict voting outcomes when a substantial share position is held by anonymous accounts. Small issuers often cannot absorb the costs associated with an aggressive proxy solicitation campaign, meaning that corporate actions that would benefit all shareholders may simply never go to a vote.<\/li>\n<li>OBOs also hinder direct engagement, increase intermediary influence, and fragment governance by shielding large shareholders from the kind of constructive dialogue that is essential to sound corporate <a class=\"glossaryLink cmtt_Institutional Shareholder\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Stewardship&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The responsible and active oversight of investment holdings by institutional shareholders to...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/%e3%82%a4%e3%83%b3%e3%83%93%e3%82%af%e3%82%bf%e3%82%b9\/&amp;quot;&gt;&#12452;&#12531;&#12532;&#12451;&#12463;&#12479;&#12473;&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/german-shareholder-meeting-review\/&amp;quot;&gt;2023 German shareholder meeting season review&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/stewardship\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/stewardship\/\"  href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/stewardship\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>stewardship<\/a>. This disproportionately impacts small to mid-sized issuers, who generally have more dispersed and retail-heavy shareholder bases, amplifying the inefficiencies because retail holders vote at lower rates generally.<\/li>\n<li>The operational and strategic risk management implications are equally troubling. Companies may avoid strategic votes entirely because they cannot access all meaningful owners. Small issuers often cannot absorb the costs of proxy contests or even routine contested proposals that their large-cap peers take in stride. There are numerous instances of public companies that declined to pursue critical business decisions, including financing proposals and governance reforms, specifically because the OBO population made the outcome too uncertain and the cost of solicitation was too high relative to the companies resources (particularly because success is not guaranteed even if the company bears the solicitation costs).<\/li>\n<\/ol>\n<h2>Chilling effect on IPOs &amp; public market participation<\/h2>\n<p>The SEC&rsquo;s data tells a stark story about the declining appeal of U.S. public markets. The number of exchange-listed companies has fallen by roughly 40% since the mid-1990s. While the causes of this decline are multifaceted and include the rising compliance costs, <a class=\"glossaryLink cmtt_Activist Shareholder Campaign\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Litigation&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Legal action initiated by either the activist investor or the targeted company to resolve...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/annual-equity-plan-replenishments\/&amp;quot;&gt;Navigating Annual Consecutive Equity Plan Replenishments: Data Insights and a Handy Checklist for Companies&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/roundtable-shareholder-activism-and-engagement\/&amp;quot;&gt;Roundtable &amp;#8211; Shareholder activism and engagement&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/litigation\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/litigation\/\"  href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/litigation\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>litigation<\/a> exposure, and expanding disclosure requirements, the OBO\/NOBO framework is a contributing factor that has not received as much attention.<\/p>\n<p>The connection between the OBO classification and the decision to go or remain public is both direct and indirect. Directly, the framework increased the cost of maintaining a public company by making proxy solicitation more expensive and less efficient than it needs to be. For small and emerging-growth companies, these costs represent a larger share of operating expenses than they do for large-cap peers. A company contemplating an IPO must factor in the ongoing cost of a <a class=\"glossaryLink cmtt_Information Agent\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Shareholder Communication&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The process of providing relevant information and updates to shareholders of both the acquiring...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/south-korean-consumer-products-company\/&amp;quot;&gt;Case Study: Activism&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/annual-equity-plan-replenishments\/&amp;quot;&gt;Navigating Annual Consecutive Equity Plan Replenishments: Data Insights and a Handy Checklist for Companies&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/shareholder-communication\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/shareholder-communication\/\" href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/shareholder-communication\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">shareholder communication<\/a> system that was designed for a market with 11.5 million brokerage accounts, not 160 million. Indirectly, the OBO classification contributes to the perception that being public subjects a company to a governance framework that is cumbersome, opaque, and structurally tilted against management&rsquo;s ability to communicate effectively with its own investors. This perception is particularly damaging for emerging and mid-sized companies that might otherwise consider the public markets as a source of growth capital. When the cost and complexity of engaging shareholders exceed the perceived benefits of a public listing, companies will rationally choose to remain private, depriving retail investors of investment opportunities and reducing the diversity, vibrancy and competitiveness of U.S. capital markets.<\/p>\n<p>The lack of direct engagement mechanisms also runs counter to ongoing efforts to enhance U.S. public markets competitiveness. For example, corporate issuers in Asia and Europe are able to operate with significantly more transparency about who owns companies, giving them a distinct financial and strategic advantage over American counterparts. [7] Updating the OBO rule is not merely a matter of domestic regulatory housekeeping. Rather, it has implications for the global competitiveness of the U.S. capital markets.<\/p>\n<h2>The SEC&rsquo;s priorities<\/h2>\n<p>The current SEC leadership has articulated a reform <a class=\"glossaryLink cmtt_AGM (Annual General Meeting) and EGM (Extraordinary General Meeting)\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Agenda&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; A structured outline of topics and activities to be covered during an AGM or EGM, including...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/german-shareholder-meeting-review\/&amp;quot;&gt;2023 German shareholder meeting season review&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.com\/ja\/south-korean-consumer-products-company\/&amp;quot;&gt;Case Study: Activism&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.com\/ja\/glossary-index\/agenda\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/agenda\/\"  href=\"https:\/\/allianceadvisors.com\/ja\/glossary-index\/agenda\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>agenda<\/a> that is directly relevant to the OBO\/NOBO question. In his February 2026 testimony before the U.S. House of Representatives Committee on Financial Services, Chairman Paul S. Atkins observed that the number of exchange-listed companies has fallen by roughly 40% since the mid-1990s, from more than 7,800 to approximately 4,761 as of September 2025. Chairman Atkins characterized this decline as a &ldquo;cautionary tale of regulatory creep&rdquo; and outlined his three-pillar plan to reverse it: (1) re-anchoring disclosures in materiality; (2) de-politicizing shareholder meetings; and (3) providing litigation alternatives for public companies. In his December 2025 keynote address at the New York Stock Exchange, Chairman Atkins argued that decades of incremental rulemaking had &ldquo;produced reams of paperwork that can do more to obscure than illuminate,&rdquo; and stressed the importance of making regulatory obligations proportional to a firm&rsquo;s size and maturity<sup>8<\/sup>. Further, the Division of Corporation Finance, under Director James Moloney, has confirmed that the SEC is advancing rulemaking to eliminate requirements that burden public companies without providing meaningful benefits to investors.<\/p>\n<p>The OBO\/NOBO framework is precisely the type of regulation that the Chairman&rsquo;s agenda is designed to address. It was adopted over four decades ago under assumptions about market structure that no longer hold. It imposes costs that do not scale with market capitalization, meaning small and mid-sized issuers bear a disproportionate burden. It creates an uneven playing field by allowing certain shareholders to demand full transparency from companies while remaining completely opaque themselves. And it introduces friction into the shareholder meeting process that the SEC&rsquo;s second pillar aims to streamline and de-politicize. Critically, the SEC&rsquo;s current Regulation S-K review and broader disclosure reform initiative demonstrate a willingness to reexamine long-standing rules that have outlived their utility. The OBO\/NOBO framework, which has not been substantively updated since its adoption in 1986, is a natural candidate for inclusion in this reform effort. Eliminating the OBO classification would remove a structural impediment that disproportionately affects the exact category of companies that the Chairman&rsquo;s reform agenda is designed to support.<\/p>\n<h2>Policy considerations<\/h2>\n<p><strong>A. Eliminate OBO Classification<\/strong><\/p>\n<p>The most straightforward and effective reform is the elimination of the OBO classification entirely, so that issuers may communicate with all their beneficial owners directly. This would not require novel regulatory architecture or a massive overhaul of the voting mechanisms already in place. It would simply extend to all beneficial owners the same level of transparency that already applies to registered shareholders and NOBO holders. Elimination of the OBO classification is positioned as a common-sense solution to an outdated regulation that no longer serves its original purpose. The privacy interest that the OBO option was designed to protect was, according to the SEC&rsquo;s historical analysis, a concern for a relatively small fraction of investors. The Commission&rsquo;s original studies found that only 8-12% of street-name holders raised an objection to disclosure, yet OBOs now represent a far larger share of shareholder bases&mdash;a development that is likely due to confusing election procedures and default settings applied by intermediaries rather than genuine investor preference for anonymity<sup>9<\/sup>.<\/p>\n<p>This reform can be accomplished through SEC rulemaking. The Commission has the authority to amend Rules 14a-13, 14b-1, and 14c-7 to eliminate the OBO election and require that all beneficial owner information be made available to issuers on the same terms currently governing NOBO lists. The Commission is actively soliciting public comments on the reform of Regulation S-K and other disclosure requirements and has demonstrated a willingness to revisit long-standing rules that impose costs disproportionate to their benefits. The OBO\/NOBO framework, which has not been substantively updated in decades, is precisely the kind of regulation that the Chairman&rsquo;s reform agenda is designed to address.<\/p>\n<p>Eliminating the OBO classification would do more than reduce costs. It would meaningfully strengthen shareholder democracy. Requiring all shareholders to be transparent to issuers levels the playing field and enhances the quality of corporate governance by ensuring that companies can engage directly with their investors and investors can trust that the companies they are invested in will be able to reach them to discuss matters of significant importance to the business. When companies can communicate with all shareholders, the quality and efficiency of corporate elections improve. Retail investors, who currently vote at far lower rates than institutional investors, are more likely to participate when they receive direct, timely communication from the companies they own. Higher participation rates produce more representative voting outcomes and reduce the risk that corporate actions are decided by a non-representative subset of the shareholder base.<\/p>\n<h2>Conclusion<\/h2>\n<p>The OBO\/NOBO shareholder communication framework is a forty-year-old regulatory artifact that was designed for a fundamentally different market. When these rules took effect in 1986, the top ten brokerage firms had 11.5 million accounts. Today, that number is 160 million. The number of individual shareholder-to-company positions has grown from an estimated 69 million to approximately 960 million. The economic assumptions that supported the original framework have been overtaken by the extraordinary expansion of share ownership in the United States.<\/p>\n<p>The costs and inefficiencies imposed by the OBO classification are real, measurable, and disproportionately borne by the small and mid-sized companies that have more retail-heavy shareholder bases that are dispersed and difficult to engage in the current landscape. The framework that fragments corporate governance, distorts voting outcomes, impairs management&rsquo;s ability to engage with its own investors, and contributes to the perception that being a public company in the U.S. is more burdensome than it needs to be and perhaps not worth it, depending on size and revenue.<\/p>\n<p>Eliminating the OBO classification is a common-sense reform that would level the playing field between companies and their shareholders, reduce the cost of maintaining a public listing, improve the quality and efficiency of shareholder democracy, and align the U.S.&rsquo;s rules with the broader trend toward ownership transparency. It would directly advance Chairman Atkins&rsquo; stated goal of reducing the cost of public listings and the fixed costs associated with maintaining a public company&mdash;particularly, those costs associated with outdated rules and regulations that ought to be revisited.<\/p>\n<p>Alliance Advisors manages over 900 shareholder meetings for corporations and mutual funds annually and sees firsthand the costs and disruptions that the OBO classification imposes on issuers of all sizes. We believe that reform is long overdue and that the current regulatory environment presents a historic opportunity to modernize the shareholder communication framework for the benefit of companies, investors, and U.S. capital markets as a whole.[\/vc_column_text][\/vc_column][\/vc_row][vc_row css_animation=&rdquo;fadeIn&rdquo; content_placement=&rdquo;middle&rdquo; remove_bottom_col_margin=&rdquo;true&rdquo; el_class=&rdquo;wpex-py-40 wpex-surface-2&Prime;][vc_column]<style>.vcex-heading.vcex_6a8cbd5d680e0{width:700px;font-size:var(--wpex-text-3xl);font-weight:600;}<\/style><\/p><h2 class=\"vcex-heading vcex-heading-plain vcex-module wpex-heading wpex-text-2xl wpex-mb-25 wpex-text-center wpex-max-w-100 wpex-mx-auto vcex_6a8cbd5d680e0\"><span class=\"vcex-heading-inner wpex-inline-block\">Get the summary report<\/span><\/h2><style>.vcex-button.vcex_6a8cbd5d68bec{border-style:solid;font-size:var(--wpex-text-sm);font-weight:700;text-transform:uppercase;letter-spacing:var(--wpex-tracking-widest);}.vcex-button.vcex_6a8cbd5d68bec .theme-button-icon-right{--wpex-btn-icon-animate-h:5px;}<\/style><div class=\"theme-button-wrap textcenter wpex-clr\"><a href=\"https:\/\/allianceadvisors.com\/wp-content\/uploads\/2026\/08\/SEC_OBO_NOBO_-SUMMARY.pdf\" class=\"vcex-button theme-button align-center inline vcex_6a8cbd5d68bec\" rel=\"nofollow\" download><span class=\"vcex-button-inner theme-button-inner wpex-flex wpex-flex-wrap wpex-items-center wpex-justify-center\">Download the summary PDF<span class=\"vcex-button-icon vcex-icon-wrap theme-button-icon-right theme-button-icon-animate-h\"><span class=\"wpex-icon wpex-icon--bidi\" aria-hidden=\"true\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 320 512\"><path d=\"M310.6 233.4c12.5 12.5 12.5 32.8 0 45.3l-192 192c-12.5 12.5-32.8 12.5-45.3 0s-12.5-32.8 0-45.3L242.7 256 73.4 86.6c-12.5-12.5-12.5-32.8 0-45.3s32.8-12.5 45.3 0l192 192z\"><\/path><\/svg><\/span><\/span><\/span><\/a><\/div> [\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=&rdquo;&rdquo;]\n<h2>Appendix A:<\/h2>\n[\/vc_column_text]<div class=\"vcex-shortcode wpex-clr\"><div id=\"footable_parent_567930\" class=\"ninja-footable-loader footable_parent ninja_table_wrapper loading_ninja_table wp_table_data_press_parent semantic_ui colored_table\">\n                    <h3 class=\"table_title footable_title\">OBO vs NOBO Distribution &ndash; Random Publicly Traded Company Sample<\/h3>\n                        <table data-ninja_table_instance=\"ninja_table_instance_1\" data-footable_id=\"567930\" data-filter-delay=\"1000\" aria-label=\"OBO vs NOBO Distribution &ndash; Random Publicly Traded Company Sample\" id=\"footable_567930\" data-unique_identifier=\"ninja_table_unique_id_1694910566_567930\" class=\" foo-table ninja_footable foo_table_567930 ninja_table_unique_id_1694910566_567930 ui table  ninja_search_right nt_type_legacy_table celled striped vertical_centered ninja_custom_color inverted footable-paging-right ninja_table_search_disabled ninja_table_pro\">\n                <colgroup>\n                            <col class=\"ninja_column_0 \">\n                            <col class=\"ninja_column_1 \">\n                            <col class=\"ninja_column_2 \">\n                            <col class=\"ninja_column_3 \">\n                            <col class=\"ninja_column_4 \">\n                            <col class=\"ninja_column_5 \">\n                            <col class=\"ninja_column_6 \">\n                            <col class=\"ninja_column_7 \">\n                            <col class=\"ninja_column_8 \">\n                    <\/colgroup>\n        <thead>\n<tr class=\"footable-header\">\n                                                                                                                                                        <th scope=\"col\" class=\"ninja_column_0 ninja_clmn_nm_company_type \">Company Type<\/th><th scope=\"col\" class=\"ninja_column_1 ninja_clmn_nm_nobo_accounts \">NOBO accounts<\/th><th scope=\"col\" class=\"ninja_column_2 ninja_clmn_nm_of_accounts \">% of accounts<\/th><th scope=\"col\" class=\"ninja_column_3 ninja_clmn_nm_nobo_shares \">NOBO Shares<\/th><th scope=\"col\" class=\"ninja_column_4 ninja_clmn_nm_of_os \">% of OS<\/th><th scope=\"col\" class=\"ninja_column_5 ninja_clmn_nm_obo_accounts \">OBO accounts<\/th><th scope=\"col\" class=\"ninja_column_6 ninja_clmn_nm_of_accounts_obo \">% of accounts<\/th><th scope=\"col\" class=\"ninja_column_7 ninja_clmn_nm_obo_shares \">OBO Shares<\/th><th scope=\"col\" class=\"ninja_column_8 ninja_clmn_nm_of_street_name \">% of Street Name<\/th><\/tr>\n<\/thead>\n<tbody>\n\n        <tr data-row_id=\"1001550\" class=\"ninja_table_row_0 nt_row_id_1001550\">\n            <td>Technology Infrastructure NASDAQ Mid Cap<\/td><td>17756<\/td><td>72%<\/td><td>22071218<\/td><td>30%<\/td><td>6778<\/td><td>28%<\/td><td>51359000<\/td><td>70%<\/td>        <\/tr>\n            <tr data-row_id=\"1001551\" class=\"ninja_table_row_1 nt_row_id_1001551\">\n            <td>Medical Equipment NASDAQ Small Cap<\/td><td>105558<\/td><td>98%<\/td><td>536708459<\/td><td>66%<\/td><td>2271<\/td><td>2%<\/td><td>277972000<\/td><td>34%<\/td>        <\/tr>\n            <tr data-row_id=\"1001552\" class=\"ninja_table_row_2 nt_row_id_1001552\">\n            <td>Technology Networks NASDAQ Small Cap<\/td><td>84533<\/td><td>82%<\/td><td>174817000<\/td><td>39%<\/td><td>18219<\/td><td>18%<\/td><td>268799000<\/td><td>61%<\/td>        <\/tr>\n            <tr data-row_id=\"1001553\" class=\"ninja_table_row_3 nt_row_id_1001553\">\n            <td>Technology Storage NASDAQ Small Cap<\/td><td>27949<\/td><td>82%<\/td><td>7493647<\/td><td>55%<\/td><td>5931<\/td><td>18%<\/td><td>6227000<\/td><td>45%<\/td>        <\/tr>\n            <tr data-row_id=\"1001554\" class=\"ninja_table_row_4 nt_row_id_1001554\">\n            <td>Biotechnology NASDAQ Micro Cap<\/td><td>22169<\/td><td>90%<\/td><td>6406579<\/td><td>63%<\/td><td>2387<\/td><td>10%<\/td><td>2105659<\/td><td>21%<\/td>        <\/tr>\n            <tr data-row_id=\"1001555\" class=\"ninja_table_row_5 nt_row_id_1001555\">\n            <td>Biopharmaceutical NASDAQ Small Cap<\/td><td>7643<\/td><td>76%<\/td><td>30155825<\/td><td>45%<\/td><td>1175<\/td><td>12%<\/td><td>2105659<\/td><td>3%<\/td>        <\/tr>\n            <tr data-row_id=\"1001556\" class=\"ninja_table_row_6 nt_row_id_1001556\">\n            <td>Crypto NASDAQ Small Cap<\/td><td>358903<\/td><td>85%<\/td><td>251953188<\/td><td>55%<\/td><td>63199<\/td><td>15%<\/td><td>153221803<\/td><td>34%<\/td>        <\/tr>\n            <tr data-row_id=\"1001557\" class=\"ninja_table_row_7 nt_row_id_1001557\">\n            <td>Regional Bank NASDAQ Small Cap<\/td><td>5659<\/td><td>61%<\/td><td>12053486<\/td><td>32%<\/td><td>3636<\/td><td>39%<\/td><td>15253017<\/td><td>40%<\/td>        <\/tr>\n            <tr data-row_id=\"1001558\" class=\"ninja_table_row_8 nt_row_id_1001558\">\n            <td>Regional Bank NASDAQ Small Cap<\/td><td>5919<\/td><td>53%<\/td><td>4737630<\/td><td>31%<\/td><td>5225<\/td><td>47%<\/td><td>9664488<\/td><td>62%<\/td>        <\/tr>\n            <tr data-row_id=\"1001559\" class=\"ninja_table_row_9 nt_row_id_1001559\">\n            <td>Regional Bank NASDAQ Small Cap<\/td><td>2271<\/td><td>74%<\/td><td>1929393<\/td><td>24%<\/td><td>781<\/td><td>26%<\/td><td>3106908<\/td><td>39%<\/td>        <\/tr>\n            <tr data-row_id=\"1001560\" class=\"ninja_table_row_10 nt_row_id_1001560\">\n            <td>Farm\/Heavy Machinery NYSE Mid Cap<\/td><td>9541<\/td><td>44%<\/td><td>5960555<\/td><td>24%<\/td><td>12236<\/td><td>56%<\/td><td>18835938<\/td><td>76%<\/td>        <\/tr>\n            <tr data-row_id=\"1001561\" class=\"ninja_table_row_11 nt_row_id_1001561\">\n            <td>Education Training NASDAQ Mid Cap<\/td><td>23719<\/td><td>52%<\/td><td>5586670<\/td><td>23%<\/td><td>22282<\/td><td>48%<\/td><td>18664367<\/td><td>77%<\/td>        <\/tr>\n            <tr data-row_id=\"1001562\" class=\"ninja_table_row_12 nt_row_id_1001562\">\n            <td>Medical Equipment NASDAQ Micro Cap<\/td><td>7929<\/td><td>85%<\/td><td>26098390<\/td><td>50%<\/td><td>1394<\/td><td>15%<\/td><td>25725670<\/td><td>50%<\/td>        <\/tr>\n            <tr data-row_id=\"1001563\" class=\"ninja_table_row_13 nt_row_id_1001563\">\n            <td>Regional Bank NYSE Small Cap<\/td><td>5919<\/td><td>53%<\/td><td>4739630<\/td><td>33%<\/td><td>5355<\/td><td>47%<\/td><td>9649882<\/td><td>67%<\/td>        <\/tr>\n            <tr data-row_id=\"1001564\" class=\"ninja_table_row_14 nt_row_id_1001564\">\n            <td>Specialty Chemicals NYSE Large Cap<\/td><td>97060<\/td><td>88%<\/td><td>47993469<\/td><td>34%<\/td><td>12738<\/td><td>12%<\/td><td>94607915<\/td><td>66%<\/td>        <\/tr>\n            <tr data-row_id=\"1001565\" class=\"ninja_table_row_15 nt_row_id_1001565\">\n            <td>Consumer Services NYSE Large Cap<\/td><td>338961<\/td><td>61%<\/td><td>79863272<\/td><td>16%<\/td><td>213317<\/td><td>39%<\/td><td>430582664<\/td><td>84%<\/td>        <\/tr>\n            <tr data-row_id=\"1001566\" class=\"ninja_table_row_16 nt_row_id_1001566\">\n            <td>Oil &amp; Gas Equipment NASDAQ Small Cap<\/td><td>480<\/td><td>5%<\/td><td>158974872<\/td><td>46%<\/td><td>10165<\/td><td>95%<\/td><td>185502819<\/td><td>54%<\/td>        <\/tr>\n            <tr data-row_id=\"1001567\" class=\"ninja_table_row_17 nt_row_id_1001567\">\n            <td>Pharmacutical NYSE Large Cap<\/td><td>2802327<\/td><td>54%<\/td><td>595909111<\/td><td>31%<\/td><td>2405035<\/td><td>46%<\/td><td>1314597128<\/td><td>69%<\/td>        <\/tr>\n            <tr data-row_id=\"1001568\" class=\"ninja_table_row_18 nt_row_id_1001568\">\n            <td>Financial Services NYSE Mid Cap<\/td><td>4341<\/td><td>46%<\/td><td>59874718<\/td><td>52%<\/td><td>5140<\/td><td>54%<\/td><td>55707791<\/td><td>48%<\/td>        <\/tr>\n            <tr data-row_id=\"1001569\" class=\"ninja_table_row_19 nt_row_id_1001569\">\n            <td>Business Equipment NYSE Small Cap<\/td><td>21938<\/td><td>76%<\/td><td>34882806<\/td><td>36%<\/td><td>6868<\/td><td>24%<\/td><td>60960663<\/td><td>64%<\/td>        <\/tr>\n            <tr data-row_id=\"1001570\" class=\"ninja_table_row_20 nt_row_id_1001570\">\n            <td>Software NASDAQ Mid Cap<\/td><td>30563<\/td><td>58%<\/td><td>28253913<\/td><td>24%<\/td><td>22011<\/td><td>42%<\/td><td>91047332<\/td><td>76%<\/td>        <\/tr>\n            <tr data-row_id=\"1001571\" class=\"ninja_table_row_21 nt_row_id_1001571\">\n            <td>Software NASDAQ Micro Cap<\/td><td>22827<\/td><td>85%<\/td><td>26193958<\/td><td>63%<\/td><td>3894<\/td><td>15%<\/td><td>15186081<\/td><td>37%<\/td>        <\/tr>\n            <tr data-row_id=\"1001572\" class=\"ninja_table_row_22 nt_row_id_1001572\">\n            <td>Software NASDAQ Mid Cap<\/td><td>149367<\/td><td>53%<\/td><td>56773418<\/td><td>35%<\/td><td>133600<\/td><td>47%<\/td><td>106816019<\/td><td>65%<\/td>        <\/tr>\n            <tr data-row_id=\"1001573\" class=\"ninja_table_row_23 nt_row_id_1001573\">\n            <td>REIT NYSE Small Cap<\/td><td>151498<\/td><td>59%<\/td><td>36659675<\/td><td>21%<\/td><td>103131<\/td><td>41%<\/td><td>140902758<\/td><td>79%<\/td>        <\/tr>\n            <tr data-row_id=\"1001574\" class=\"ninja_table_row_24 nt_row_id_1001574\">\n            <td>Medical Instruments NASDAQ Mid Cap<\/td><td>159916<\/td><td>53%<\/td><td>20274251<\/td><td>25%<\/td><td>144113<\/td><td>47%<\/td><td>60199011<\/td><td>75%<\/td>        <\/tr>\n            <tr data-row_id=\"1001575\" class=\"ninja_table_row_25 nt_row_id_1001575\">\n            <td>Insurance NYSE Large Cap<\/td><td>513282<\/td><td>50%<\/td><td>69742105<\/td><td>26%<\/td><td>522387<\/td><td>50%<\/td><td>200945538<\/td><td>74%<\/td>        <\/tr>\n            <tr data-row_id=\"1001576\" class=\"ninja_table_row_26 nt_row_id_1001576\">\n            <td>Utility NYSE Large Cap<\/td><td>249470<\/td><td>48%<\/td><td>79094426<\/td><td>27%<\/td><td>268482<\/td><td>52%<\/td><td>214061724<\/td><td>73%<\/td>        <\/tr>\n            <tr data-row_id=\"1001577\" class=\"ninja_table_row_27 nt_row_id_1001577\">\n            <td>Generic Drugs NASDAQ Small Cap<\/td><td>17777<\/td><td>84%<\/td><td>3373193<\/td><td>56%<\/td><td>3489<\/td><td>16%<\/td><td>2612269<\/td><td>44%<\/td>        <\/tr>\n            <tr data-row_id=\"1001578\" class=\"ninja_table_row_28 nt_row_id_1001578\">\n            <td>Biotech NASDAQ Micro Cap<\/td><td>25876<\/td><td>87%<\/td><td>47465471<\/td><td>48%<\/td><td>3902<\/td><td>13%<\/td><td>51103793<\/td><td>52%<\/td>        <\/tr>\n            <tr data-row_id=\"1001579\" class=\"ninja_table_row_29 nt_row_id_1001579\">\n            <td>Regional Bank NASDAQ Micro Cap<\/td><td>7219<\/td><td>64%<\/td><td>5156663<\/td><td>33%<\/td><td>3993<\/td><td>36%<\/td><td>10624632<\/td><td>67%<\/td>        <\/tr>\n            <tr data-row_id=\"1001580\" class=\"ninja_table_row_30 nt_row_id_1001580\">\n            <td>Auto Parts Mfg. NYSE Large Cap<\/td><td>130749<\/td><td>61%<\/td><td>58409885<\/td><td>26%<\/td><td>84682<\/td><td>39%<\/td><td>166233603<\/td><td>74%<\/td>        <\/tr>\n            <tr data-row_id=\"1001581\" class=\"ninja_table_row_31 nt_row_id_1001581\">\n            <td>Medical Devise NYSE Large Cap<\/td><td>1076536<\/td><td>52%<\/td><td>327955360<\/td><td>20%<\/td><td>985371<\/td><td>48%<\/td><td>1274508034<\/td><td>80%<\/td>        <\/tr>\n            <tr data-row_id=\"1001582\" class=\"ninja_table_row_32 nt_row_id_1001582\">\n            <td>Consumer Electronic NASDAQ Micro Cap<\/td><td>8547<\/td><td>88%<\/td><td>1598869<\/td><td>64%<\/td><td>1154<\/td><td>12%<\/td><td>918176<\/td><td>36%<\/td>        <\/tr>\n            <tr data-row_id=\"1001583\" class=\"ninja_table_row_33 nt_row_id_1001583\">\n            <td>Gaming NASDAQ Micro Cap<\/td><td>1674<\/td><td>85%<\/td><td>8316005<\/td><td>61%<\/td><td>300<\/td><td>15%<\/td><td>5339391<\/td><td>39%<\/td>        <\/tr>\n            <tr data-row_id=\"1001584\" class=\"ninja_table_row_34 nt_row_id_1001584\">\n            <td>Building Products NYSE Mid Cap<\/td><td>127668<\/td><td>53%<\/td><td>26381986<\/td><td>22%<\/td><td>114783<\/td><td>47%<\/td><td>96145191<\/td><td>78%<\/td>        <\/tr>\n            <tr data-row_id=\"1001585\" class=\"ninja_table_row_35 nt_row_id_1001585\">\n            <td>Medical Devices NASDAQ Micro Cap<\/td><td>2508<\/td><td>87%<\/td><td>1126615<\/td><td>70%<\/td><td>387<\/td><td>13%<\/td><td>475100<\/td><td>30%<\/td>        <\/tr>\n            <tr data-row_id=\"1001586\" class=\"ninja_table_row_36 nt_row_id_1001586\">\n            <td>Real Estate NASDAQ Small Cap<\/td><td>21899<\/td><td>52%<\/td><td>8644533<\/td><td>27%<\/td><td>20088<\/td><td>48%<\/td><td>23026382<\/td><td>73%<\/td>        <\/tr>\n            <tr data-row_id=\"1001587\" class=\"ninja_table_row_37 nt_row_id_1001587\">\n            <td>Oil &amp; Gas NASDAQ Mid Cap<\/td><td>79144<\/td><td>65%<\/td><td>14980066<\/td><td>25%<\/td><td>42768<\/td><td>35%<\/td><td>45677973<\/td><td>75%<\/td>        <\/tr>\n            <tr data-row_id=\"1001588\" class=\"ninja_table_row_38 nt_row_id_1001588\">\n            <td>Communications Technology NASDAQ Large Cap<\/td><td>223509<\/td><td>53%<\/td><td>30613259<\/td><td>21%<\/td><td>195116<\/td><td>47%<\/td><td>117062698<\/td><td>79%<\/td>        <\/tr>\n            <tr data-row_id=\"1001589\" class=\"ninja_table_row_39 nt_row_id_1001589\">\n            <td>Insurance NASDAQ Large Cap<\/td><td>162264<\/td><td>43%<\/td><td>42210247<\/td><td>30%<\/td><td>213841<\/td><td>57%<\/td><td>100284353<\/td><td>70%<\/td>        <\/tr>\n            <tr data-row_id=\"1001590\" class=\"ninja_table_row_40 nt_row_id_1001590\">\n            <td>Biotech NASDAQ Micro Cap<\/td><td>5553<\/td><td>86%<\/td><td>5540062<\/td><td>76%<\/td><td>938<\/td><td>14%<\/td><td>1779845<\/td><td>24%<\/td>        <\/tr>\n            <tr data-row_id=\"1001591\" class=\"ninja_table_row_41 nt_row_id_1001591\">\n            <td>Regional Bank NASDAQ Micro Cap<\/td><td>6759<\/td><td>64%<\/td><td>8156496<\/td><td>30%<\/td><td>3858<\/td><td>36%<\/td><td>18993822<\/td><td>70%<\/td>        <\/tr>\n            <tr data-row_id=\"1001592\" class=\"ninja_table_row_42 nt_row_id_1001592\">\n            <td>Oil &amp; Gas NYSE Large Cap<\/td><td>1590121<\/td><td>60%<\/td><td>327210795<\/td><td>25%<\/td><td>1040968<\/td><td>40%<\/td><td>963867391<\/td><td>75%<\/td>        <\/tr>\n            <tr data-row_id=\"1001593\" class=\"ninja_table_row_43 nt_row_id_1001593\">\n            <td>Biotech NASDAQ Micro Cap<\/td><td>7008<\/td><td>85%<\/td><td>49576535<\/td><td>69%<\/td><td>1222<\/td><td>15%<\/td><td>22499800<\/td><td>31%<\/td>        <\/tr>\n            <tr data-row_id=\"1001594\" class=\"ninja_table_row_44 nt_row_id_1001594\">\n            <td>Medical Devices NASDAQ Micro Cap<\/td><td>14623<\/td><td>81%<\/td><td>17030354<\/td><td>55%<\/td><td>3514<\/td><td>19%<\/td><td>14126213<\/td><td>45%<\/td>        <\/tr>\n            <tr data-row_id=\"1001595\" class=\"ninja_table_row_45 nt_row_id_1001595\">\n            <td>Regional Bank NASDAQ Micro Cap<\/td><td>7918<\/td><td>42%<\/td><td>8700628<\/td><td>29%<\/td><td>11086<\/td><td>58%<\/td><td>20995076<\/td><td>71%<\/td>        <\/tr>\n            <tr data-row_id=\"1001596\" class=\"ninja_table_row_46 nt_row_id_1001596\">\n            <td>Regional Bank NASDAQ Micro Cap<\/td><td>1357309<\/td><td>48%<\/td><td>110401720<\/td><td>26%<\/td><td>1488693<\/td><td>52%<\/td><td>312541621<\/td><td>74%<\/td>        <\/tr>\n            <tr data-row_id=\"1001597\" class=\"ninja_table_row_47 nt_row_id_1001597\">\n            <td>Health Care NYSE Large Cap<\/td><td>494300<\/td><td>55%<\/td><td>54084368<\/td><td>23%<\/td><td>404263<\/td><td>45%<\/td><td>177666372<\/td><td>77%<\/td>        <\/tr>\n            <tr data-row_id=\"1001598\" class=\"ninja_table_row_48 nt_row_id_1001598\">\n            <td>Asset Mgt NASDAQ Small Cap<\/td><td>24329<\/td><td>74%<\/td><td>23172173<\/td><td>62%<\/td><td>8434<\/td><td>26%<\/td><td>14449431<\/td><td>38%<\/td>        <\/tr>\n            <tr data-row_id=\"1001599\" class=\"ninja_table_row_49 nt_row_id_1001599\">\n            <td>Industrial NYSE Large Cap<\/td><td>72556<\/td><td>50%<\/td><td>32730675<\/td><td>24%<\/td><td>71837<\/td><td>50%<\/td><td>104240110<\/td><td>76%<\/td>        <\/tr>\n            <tr data-row_id=\"1001600\" class=\"ninja_table_row_50 nt_row_id_1001600\">\n            <td>Regional Bank NASDAQ Mid Cap<\/td><td>20932<\/td><td>53%<\/td><td>62155364<\/td><td>34%<\/td><td>18922<\/td><td>47%<\/td><td>118858716<\/td><td>66%<\/td>        <\/tr>\n            <tr data-row_id=\"1001601\" class=\"ninja_table_row_51 nt_row_id_1001601\">\n            <td>Auto Dealerships NYSE Mid Cap<\/td><td>35334<\/td><td>50%<\/td><td>4235163<\/td><td>34%<\/td><td>35187<\/td><td>50%<\/td><td>8323914<\/td><td>66%<\/td>        <\/tr>\n            <tr data-row_id=\"1001602\" class=\"ninja_table_row_52 nt_row_id_1001602\">\n            <td>Manufacturing NYSE Mid Cap<\/td><td>34084<\/td><td>46%<\/td><td>14285548<\/td><td>24%<\/td><td>40012<\/td><td>54%<\/td><td>44564689<\/td><td>76%<\/td>        <\/tr>\n            <tr data-row_id=\"1001603\" class=\"ninja_table_row_53 nt_row_id_1001603\">\n            <td>Computer Hardware NYSE Large Cap<\/td><td>404479<\/td><td>67%<\/td><td>297546664<\/td><td>30%<\/td><td>199108<\/td><td>33%<\/td><td>678168081<\/td><td>70%<\/td>        <\/tr>\n            <tr data-row_id=\"1001604\" class=\"ninja_table_row_54 nt_row_id_1001604\">\n            <td>Medical Instruments NASDAQ Mid Cap<\/td><td>6710<\/td><td>53%<\/td><td>9720906<\/td><td>34%<\/td><td>6002<\/td><td>47%<\/td><td>18988565<\/td><td>66%<\/td>        <\/tr>\n            <tr data-row_id=\"1001605\" class=\"ninja_table_row_55 nt_row_id_1001605\">\n            <td>Paper NYSE Large Cap<\/td><td>269320<\/td><td>57%<\/td><td>99352853<\/td><td>18%<\/td><td>204399<\/td><td>43%<\/td><td>441675252<\/td><td>82%<\/td>        <\/tr>\n            <tr data-row_id=\"1001606\" class=\"ninja_table_row_56 nt_row_id_1001606\">\n            <td>Medical Devise NYSE Large Cap<\/td><td>1189274<\/td><td>52%<\/td><td>102125100<\/td><td>26%<\/td><td>1111171<\/td><td>48%<\/td><td>283308784<\/td><td>74%<\/td>        <\/tr>\n            <tr data-row_id=\"1001607\" class=\"ninja_table_row_57 nt_row_id_1001607\">\n            <td>Asset Manager NYSE Large Cap<\/td><td>129435<\/td><td>58%<\/td><td>112161046<\/td><td>29%<\/td><td>93412<\/td><td>42%<\/td><td>271116193<\/td><td>71%<\/td>        <\/tr>\n            <tr data-row_id=\"1001608\" class=\"ninja_table_row_58 nt_row_id_1001608\">\n            <td>REIT NYSE Small Cap<\/td><td>78100<\/td><td>85%<\/td><td>55461660<\/td><td>65%<\/td><td>14266<\/td><td>15%<\/td><td>30460017<\/td><td>35%<\/td>        <\/tr>\n            <tr data-row_id=\"1001609\" class=\"ninja_table_row_59 nt_row_id_1001609\">\n            <td>REIT NYSE Large Cap<\/td><td>142622<\/td><td>50%<\/td><td>139242330<\/td><td>19%<\/td><td>143589<\/td><td>50%<\/td><td>604164901<\/td><td>81%<\/td>        <\/tr>\n            <tr data-row_id=\"1001610\" class=\"ninja_table_row_60 nt_row_id_1001610\">\n            <td>Semiconductor NASDAQ Large Cap<\/td><td>49439<\/td><td>53%<\/td><td>25940358<\/td><td>18%<\/td><td>43970<\/td><td>47%<\/td><td>120614657<\/td><td>82%<\/td>        <\/tr>\n            <tr data-row_id=\"1001611\" class=\"ninja_table_row_61 nt_row_id_1001611\">\n            <td>Consumer Fixtures NYSE Small Cap<\/td><td>48672<\/td><td>66%<\/td><td>46695171<\/td><td>33%<\/td><td>25490<\/td><td>34%<\/td><td>95006998<\/td><td>67%<\/td>        <\/tr>\n            <tr data-row_id=\"1001612\" class=\"ninja_table_row_62 nt_row_id_1001612\">\n            <td>Telecom NASDAQ Large Cap<\/td><td>304738<\/td><td>77%<\/td><td>418761322<\/td><td>40%<\/td><td>90537<\/td><td>23%<\/td><td>635390782<\/td><td>60%<\/td>        <\/tr>\n            <tr data-row_id=\"1001613\" class=\"ninja_table_row_63 nt_row_id_1001613\">\n            <td>Biotech NASDAQ Micro Cap<\/td><td>8403<\/td><td>87%<\/td><td>10905182<\/td><td>81%<\/td><td>1256<\/td><td>13%<\/td><td>2505024<\/td><td>19%<\/td>        <\/tr>\n            <tr data-row_id=\"1001614\" class=\"ninja_table_row_64 nt_row_id_1001614\">\n            <td>Marine NASDAQ Large Cap<\/td><td>32129<\/td><td>52%<\/td><td>8666120<\/td><td>27%<\/td><td>29908<\/td><td>48%<\/td><td>23231640<\/td><td>73%<\/td>        <\/tr>\n            <tr data-row_id=\"1001615\" class=\"ninja_table_row_65 nt_row_id_1001615\">\n            <td>Health Care NYSE Large Cap<\/td><td>117299<\/td><td>62%<\/td><td>11724558<\/td><td>22%<\/td><td>72535<\/td><td>38%<\/td><td>42797582<\/td><td>78%<\/td>        <\/tr>\n            <tr data-row_id=\"1001616\" class=\"ninja_table_row_66 nt_row_id_1001616\">\n            <td>Telcom Equip NYSE Large Cap<\/td><td>763179<\/td><td>55%<\/td><td>43009054<\/td><td>24%<\/td><td>632334<\/td><td>45%<\/td><td>138540447<\/td><td>76%<\/td>        <\/tr>\n            <tr data-row_id=\"1001617\" class=\"ninja_table_row_67 nt_row_id_1001617\">\n            <td>Biotech Nasdaq Small Cap<\/td><td>6201<\/td><td>62%<\/td><td>25384021<\/td><td>38%<\/td><td>1050<\/td><td>12%<\/td><td>22702458<\/td><td>34%<\/td>        <\/tr>\n            <tr data-row_id=\"1001618\" class=\"ninja_table_row_68 nt_row_id_1001618\">\n            <td><strong>Totals<\/strong><\/td><td><strong>14333694<\/strong><\/td><td><strong>56%<\/strong><\/td><td><strong>5085410042<\/strong><\/td><td><strong>31%<\/strong><\/td><td><strong>11469585<\/strong><\/td><td><strong>44%<\/strong><\/td><td><strong>10959397810<\/strong><\/td><td><strong>68%<\/strong><\/td>        <\/tr>\n    <\/tbody><!--ninja_tobody_rendering_done-->\n    <\/table>\n    \n    \n    \n<\/div>\n<\/div>[vc_column_text css=&rdquo;&rdquo;]\n<h2>Appendix B:<\/h2>\n<h3>OBO vs NOBO Distribution &ndash; Mutual Funds Sample<\/h3>\n<div class=\"wp-block-image\"><img decoding=\"async\" class=\"wpa-warning wpa-image-missing-alt aligncenter wp-image-567948 size-full\" src=\"https:\/\/allianceadvisors.com\/wp-content\/uploads\/2026\/08\/CHART-6.png\" alt=\"\" width=\"1420\" height=\"466\" data-warning=\"Missing alt text\" srcset=\"https:\/\/allianceadvisors.com\/wp-content\/uploads\/2026\/08\/CHART-6.png 1420w, https:\/\/allianceadvisors.com\/wp-content\/uploads\/2026\/08\/CHART-6-300x98.png 300w, https:\/\/allianceadvisors.com\/wp-content\/uploads\/2026\/08\/CHART-6-1024x336.png 1024w, https:\/\/allianceadvisors.com\/wp-content\/uploads\/2026\/08\/CHART-6-768x252.png 768w\" sizes=\"(max-width: 1420px) 100vw, 1420px\"\/><\/div>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row css=&rdquo;.vc_custom_1753787606989{padding: 20px !important;background-color: #F1F1F1 !important;}&rdquo;][vc_column][vc_column_text css=&rdquo;&rdquo; font_size=&rdquo;13px&rdquo;]\n<h3>Citations<\/h3>\n<p><sup>1 <\/sup>Robinhood, Robinhood Markets, Inc. Reports February 2026 Operating Data, https:\/\/investors.robinhood.com\/static-files\/79cafd75-c807-4044-a305-8f99a5b295dd.<\/p>\n<p><sup>2 <\/sup>Charles Schwab, Self-Directed Brokerage Account Indicators, https:\/\/corporateservices.schwab.acsitefactory.com\/resource\/sdba-indicators-q4-2025-report.<\/p>\n<p><sup>3 <\/sup>Alliance Advisors, Random Publicly Traded Company Sample.<\/p>\n<p><sup>4 <\/sup>See Facilitating Shareholder Communications, SEC Release No. 34-22533, [1985-1986 Transfer Binder] Fed. Sec. L. Rep. (CCH) &para; 83,930 (Oct. 15, 1985).<\/p>\n<p><sup>5 <\/sup>Alliance Advisors, Mutual Funds Sample.<\/p>\n<p><sup>6 <\/sup>In 2024, retail investors accounted for 88% of the $28.5 trillion mutual fund market. Investment Company Institute, 2025 Investment Company Fact Book, available at https:\/\/icifactbook.org\/pdf\/2025-factbook.pdf.<\/p>\n<p><sup>7 <\/sup>See generally Joseph Caruso, Leveling the Playing Field of Corporate and Shareholder Transparency &ndash; Interview with Optimizer Magazine, available at https:\/\/allianceadvisors.com\/leveling-the-playing-field-of-corporate-and-shareholder-transparency\/.<\/p>\n<p><sup>8 <\/sup>Paul S. Atkins, Revitalizing America&rsquo;s Markets at 250 (Dec. 2, 2025), available at https:\/\/www.sec.gov\/newsroom\/speeches-statements\/atkins-120225-revitalizing-americas-markets-250.<\/p>\n<p><sup>9 <\/sup>See Division of Corporate Finance, Securities and Exchange Commission, Report to Senate Comm. on Banking, Housing and Urban Affairs, 96th Cong., Staff Report on Corporate Accountability 328 (Comm. Print 1980).[\/vc_column_text][\/vc_column][\/vc_row]\n<\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row css_animation=&#8221;fadeIn&#8221; content_placement=&#8221;bottom&#8221; column_spacing=&#8221;0px&#038;#8&hellip;<\/p>\n","protected":false},"author":35,"featured_media":63644,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[379],"tags":[],"post_series":[],"ppma_author":[466],"class_list":["post-567961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-ja","entry","has-media"],"authors":[{"term_id":466,"user_id":35,"is_guest":0,"slug":"sam","display_name":"Sam Chandoha","avatar_url":{"url":"https:\/\/allianceadvisors.com\/wp-content\/uploads\/2023\/02\/Sam-Chandoha-2023.jpg","url2x":"https:\/\/allianceadvisors.com\/wp-content\/uploads\/2023\/02\/Sam-Chandoha-2023.jpg"},"author_category":"1","first_name":"Sam","last_name":"Chandoha","user_url":"","job_title":"Chief Marketing Officer & Head of Corporate Affairs","description":"With decades of entrepreneurial and direct industry experience Sam is uniquely poised to provide strategic advice on business development, acquisitions and global expansion."}],"_links":{"self":[{"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/posts\/567961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/comments?post=567961"}],"version-history":[{"count":1,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/posts\/567961\/revisions"}],"predecessor-version":[{"id":567969,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/posts\/567961\/revisions\/567969"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/media\/63644"}],"wp:attachment":[{"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/media?parent=567961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/categories?post=567961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/tags?post=567961"},{"taxonomy":"post_series","embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/post_series?post=567961"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/allianceadvisors.com\/ja\/wp-json\/wp\/v2\/ppma_author?post=567961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}