SEC Measure Regulating Proxy Advisory Firms Declared Invalid (1)

A 2020 SEC rule subjecting firms that offer proxy voting advice to the regulator’s authority is invalid, a federal court ruled.

The Securities and Exchange Commission “acted contrary to law and in excess of statutory authority when it amended the proxy rules’ definition of ‘solicit’ and ‘solicitation’ to include proxy voting advice for a fee,” Judge Amit P. Mehta said Feb. 23 for the US District Court for the District of Columbia. A 2022 SEC repeal of some proxy firm requirements under the rule was insufficient, he said.

Large institutional investors rely on Institutional Shareholder Services Inc., Glass, Lewis & ...