The new unit, called ISS Proxy Australia, will serve as the hub for ISS' Australian operations and will provide in-market research, service and expertise to institutional investors and superannuation funds in the region and worldwide. The group, with its deep knowledge of corporate governance practices in Australia and New Zealand, its high quality proxy research and its unique governance data, will play a critical role in delivering continued value to ISS clients worldwide.

"We have an acute awareness of institutional client needs across the world's markets and we place a high value on local market expertise," said John M. Connolly, president and chief executive officer of ISS. "At the same time, we also recognize that institutional investors play on a world stage and need a corporate governance and proxy voting partner that can deliver a truly global end-to-end solution."

Founded in 1985, ISS has over 1300 institutional clients worldwide that manage more that $23 trillion of the world's equity. The firm provides comprehensive research and informed proxy voting recommendations on more than 33,000 companies across 115 markets and offers the industry's only integrated end-to-end voting solution.

"Linking with a firm the caliber of ISS gives us global reach for our best in class Australian governance analysis, while allowing us to provide the same level of deep expertise and quality service to our local clients," said co- founder of Proxy Australia, Geof Stapledon, who will lead the new ISS unit. "Institutional investors will now have on-line access to a complete set of governance indicators for Australian companies and a range of new services to help them manage governance risk."

Proxy Australia has 30+ clients including an exclusive relationship with the Australian Council of Superannuation Investors (ACSI). The firm currently covers over 200 Australian and 20 New Zealand companies and offers a database of five years of governance data on S&P/ASX 200 companies. After integrating with ISS, the new unit will expand its Australia and New Zealand research universe and offer a complete continuum of solutions including corporate governance policies, proxy research, vote recommendations, vote execution services, vote disclosure and reporting, in addition to corporate governance ratings on 8000 companies and a securities class action claims service.

When the combination of Proxy Australia and Institutional Shareholder Services is complete in 2006, clients will enjoy significant benefits including a "best of both" research product, solutions designed with local market interests in mind, straight-through vote processing, Australia and New Zealand market expertise and service, as well as access to an expanded suite of corporate governance solutions globally.