Under Rule 14a-13, the broker search is the inquiry a public company must send to brokers, banks, and other record holders before a shareholder meeting to find out how many beneficial owners hold its shares in street name, so proxy materials can be forwarded to each of them. The inquiry has to go out at least 20 business days before the meeting’s record date, and the company pays the reasonable costs of getting materials into investors’ hands.
What the Inquiry Has to Ask
When a company plans to solicit proxies, it must contact every record holder it knows about: brokers, dealers, banks, voting trustees, and similar entities holding shares for others. Each inquiry asks three things: whether other people are the true beneficial owners of those shares, how many sets of proxy materials the intermediary needs to forward, and whether the intermediary has designated a specific office or agent to handle the request.1eCFR. 17 CFR 240.14a-13 – Obligation of Registrants in Communicating With Beneficial Owners
The inquiry must go by first-class mail or an equally fast method. The numbers that come back drive everything downstream. Underestimate the count and some investors won’t receive voting materials, which can put the legitimacy of the meeting itself at risk.
Following the Chain to Respondent Banks
Holding structures often stack. A broker may hold through a respondent bank, which holds through another bank. Rule 14a-13(a)(2) requires the company to chase every link: when a record holder’s response names additional respondent banks, the company must send the same inquiry to each of them within one business day of getting that response.1eCFR. 17 CFR 240.14a-13 – Obligation of Registrants in Communicating With Beneficial Owners
One carve-out: the inquiry doesn’t need to cover beneficial owners of exempt employee benefit plan securities.
The 20-Business-Day Rule
Companies must launch the broker search at least 20 business days before the record date of the shareholder meeting. That lead time lets intermediaries poll their systems, count beneficial owners, and report back accurately.2Securities and Exchange Commission. 17 CFR 240.14a-13 – Obligation of Registrants in Communicating With Beneficial Owners
The rule leaves room for situations where the full 20 days isn’t realistic:
- For special meetings where urgency makes the full window impracticable, the company must start as far in advance as the situation allows.
- For consent solicitations rather than formal meetings, the same “as soon as practicable” standard applies if 20 days before the earliest effective date isn’t feasible.
- A national securities exchange may permit a later start for good cause shown.
2026 SEC Staff Flexibility
In January 2026, the SEC staff issued guidance through its Compliance and Disclosure Interpretations (CDI Question 133.02) that softens the 20-business-day requirement in practice. The staff indicated it will not object if a company conducts its broker search fewer than 20 business days before the record date, provided two conditions are met: the company reasonably believes proxy materials will still reach beneficial owners on time, and the company otherwise complies with the rest of Rule 14a-13. That matters for issuers working on compressed timelines.
How Brokers Must Respond
The broker search isn’t one-way. Rule 14b-1 requires registered brokers and dealers to respond within seven business days of receiving the inquiry, using first-class mail or an equally prompt method. The response must include the approximate number of beneficial-owner customers, the number who have objected to having their identity disclosed, and the identity of any designated agent the intermediary uses for these obligations.3eCFR. 17 CFR 240.14b-1 – Obligation of Registered Brokers and Dealers in Connection With the Prompt Forwarding of Certain Communications to Beneficial Owners
This seven-day response window is why the 20-business-day head start matters. Between the response, the count reconciliation, printing, and shipping, every day of slack in the timeline gets used.
Getting Materials to Intermediaries
Once the company knows how many sets each intermediary needs, it must supply the proxy statement, annual report, and any other soliciting materials in a timely manner. The materials must arrive in the quantities, format, and locations that the record holder or respondent bank reasonably requests so they can forward everything to each beneficial owner.2Securities and Exchange Commission. 17 CFR 240.14a-13 – Obligation of Registrants in Communicating With Beneficial Owners
The intermediary has its own regulatory duty to forward materials promptly. If the company ships late, the intermediary can’t meet its deadline, and beneficial owners may not have their proxy cards in hand before the vote. A shortfall in materials or a delivery delay can leave the meeting without a quorum, meaning no official business can be conducted.
Notice and Access as an Alternative
Companies don’t have to mail full paper packages. Rule 14a-16 allows a registrant to satisfy its delivery obligations by sending a Notice of Internet Availability of Proxy Materials. The company posts the proxy statement and annual report on a publicly accessible website, free of charge, and sends a short notice directing shareholders there.4eCFR. 17 CFR 240.14a-16 – Internet Availability of Proxy Materials
The timeline shifts. The registrant must give intermediaries enough lead time to prepare, print, and mail the notice to beneficial owners at least 40 calendar days before the meeting date, a longer runway than the 20-business-day broker search window. The materials must be live on the website no later than when the notice is mailed and must remain available through the meeting’s conclusion.4eCFR. 17 CFR 240.14a-16 – Internet Availability of Proxy Materials
Notice and access cuts printing and postage costs, which is why most large public companies use it. The broker search under Rule 14a-13 still has to happen, because that’s how the company knows where to send the notices and how many to produce.
Who Pays
The company does. Rule 14a-13(a)(5) requires the registrant to reimburse each record holder and respondent bank for the reasonable expenses of forwarding proxy materials to beneficial owners.2Securities and Exchange Commission. 17 CFR 240.14a-13 – Obligation of Registrants in Communicating With Beneficial Owners
What counts as reasonable isn’t left to negotiation. The NYSE maintains an approved fee schedule under Rule 451 that sets standard processing rates. For routine proxy solicitations, the per-account fee is tiered by the total number of beneficial-owner accounts through which the company’s shares are held:
- Up to 10,000 accounts: $0.50 per account
- 10,001 to 100,000: $0.47 per account
- 100,001 to 300,000: $0.39 per account
- 300,001 to 500,000: $0.34 per account
- Above 500,000: $0.32 per account
When an opposition proxy is in play, such as a contested election, the rate rises to $1.00 per account regardless of tier.5U.S. Securities and Exchange Commission. NYSE Rule 451 – Equities
On top of the per-account processing fee, intermediaries that coordinate multiple nominees charge a supplemental fee of $22.00 per nominee, plus a separate per-account intermediary unit fee that starts at $0.14 for smaller issuers and scales down to $0.07 for the largest.5U.S. Securities and Exchange Commission. NYSE Rule 451 – Equities
For a mid-cap company with 50,000 beneficial-owner accounts, these fees alone can run into the tens of thousands of dollars before postage.
What the Broker Search Does Not Give You
The broker search reaches every beneficial owner through their intermediary, but it does not put every investor’s name on the company’s desk. Investors who instruct their broker to withhold their identity are called objecting beneficial owners, or OBOs. Companies cannot obtain names or addresses for OBOs. The only way to reach them is through the intermediary; the broker or bank forwards on the company’s behalf, and the company never learns who the OBO is.
This matters because OBOs often represent a significant share of outstanding stock. A company planning a contested vote or an engagement campaign may find that a large portion of its investor base is inaccessible for direct outreach. The proxy distribution machinery under Rule 14a-13(a) still gets materials to OBOs through their intermediaries. Direct follow-up is another matter, and it requires a separate NOBO list request under Rule 14a-13(b), which sits alongside the broker search rather than inside it.