Answer: when it's a selective mailing sent out to a privileged few under embargo before the formal announcement date.

Today we have the case of Novartis, which yesterday (Thursday, 30-Jan-14) faxed (yes, faxed) an advance copy of its AGM meeting notice to selected names on their share register ahead of the formal dispatch to ordinary shareholders.

In an era when notifications can be formally announced with a single mouse-click and simultaneously disseminated around the world, one wonders why a company would choose to deviate from its own articles of association by sending a meeting notice to a sub-set of their shareholders (and one of their providers) ahead of the formal dispatch day - potentially in violation of article 12 of their own articles of incorporation. Unfortunately, by so doing, there are unintended consequences which deserve highlighting.

It is likely there are thousands of Swiss shareholders who have no access to the meeting notice today (Friday, 31-Jan-14), whilst at the same time, some select global investors dotted around the world have it popping up on their PCs thanks to the custodian(s) and their ubiquitous appointed proxy distribution agent who have ignored the confidentiality of the announcement and disseminated it today anyway.

Perhaps most tragically, by disseminating the notice on a privileged access basis to the one provider with whom we understand Swiss issuers in particular have had most frustration in recent years, they are also perpetuating the problem they wish to solve - namely the dominance of a single provider in vote agency through whom practically everything must pass.

Also, there are other service providers (including Manifest) who have been put at a commercial disadvantage because, despite also having access to the notice, we have been told we are not allowed to put it up on our systems until Monday - formal dispatch day. We could have put it online anyway on the basis that it had been disclosed, but we thought we ought to check with the issuer first as a matter of courtesy. Novartis' insistence on "keeping to the deadline" seems pointless - another service provider has broken the embargo - and has, at time of writing, not taken the documents down (update 3rd February: the notice was in fact subsequently taken down over the weekend prior to dispatch date today, though of course after the damage was done).

This episode undermines the principle of fair access to information to the owners, in particular not discriminating against minority/retail shareholders. Having given the company a chance to rectify the situation by allowing us (and all other shareholders or service providers) formal access to the notice today, we are disappointed to report that all we can do at this point in time is write this blog piece highlighting the problem.

As for the systems and controls of the custodian(s) and their outsourced proxy vendor, we shall just have to wait and see if the FCA and other European regulators take proxy plumbing problems more seriously than they have done in previous years.