Proxy advisory firms (Proxy Firms) have long provided institutional investors advice and recommendations with respect to management and shareholder proxy proposals. In recent years, the Securities and Exchange Commission (SEC) has expressed concerns over the accuracy, process, and conflicts of interests that may affect such advice and recommendations. Consequently, the SEC proposed amendments to the federal proxy rules in November 2019 which would have required that Proxy Firms maintain a review process allowing issuers an opportunity to comment on advice before its dissemination. However, the SEC pulled back on this proposed requirement after the two leading Proxy Firms (ISS and Glass Lewis) pointed out many burdens of such a review process. In its stead, on July 22, 2020, the SEC adopted a set of principle-based rules for Proxy Firms.
Continue reading the full GT Alert, “The SEC’s 2020 Amendments to Proxy Rules and Supplemental Guidance to Investment Advisers on Proxy Voting Responsibilities.”