U.S. companies scored a long-sought win Wednesday when the
The main target of the SEC’s overhaul is firms such as
The prospect of a crackdown has generated intense opposition from
- The final rule, which SEC commissioners approved 3-1 on Wednesday, is softer than a proposal the regulator issued in November. That’s because it doesn’t include a controversial requirement that proxy advisers share their recommendations with corporations before they are submitted to shareholders. Instead, the regulation requires proxy advisers to adopt publicly disclosed policies and procedures aimed at ensuring investors are made aware of companies’ opposing views and other issues, according to the SEC. Proxy firms can be held legally liable if they don’t adhere to the policies.
- Under the SEC’s plan, proxy advisers’ new policies should ensure that their recommendations are shared with corporations at the same time as shareholders. The SEC also intends to issue guidance for how fund managers should deal with the new requirements and on their use of electronic-voting platforms, which are services offered by ISS and Glass Lewis to make it easier for investors to vote their shares.
- The SEC held off in approving a related rule first proposed in November that would increase the threshold of how much stock relatively new investors must own to submit shareholder proposals. The regulation, which also would increase the amount of support needed to submit proposals that have previously failed, remains on the SEC’s agenda.
- The rule approved Wednesday also codifies that proxy voting advice is generally covered by SEC regulations and requires that the advisory firms disclose material conflicts of interest.
- “Today’s recommendations will help ensure that the interests of Main Street investors and the obligations of those who vote on their behalf will not only be better aligned, but better decisions will be made,” SEC Chairman
Jay Clayton, a political independent, said in remarks ahead of the vote.
- Clayton generated controversy last year when he pointed to public comment letters that indicated retail investors backed the overhaul. Some of letters appeared to be fakes, designed to trick the SEC.
Dimon Gets Win Over ‘Lazy’ Investors on Corporate Vote Rules SEC Affirms Authority Over Proxy Advisory Firms That CEOs Hate CEOs Nearer to Win on Investor Vote Rules as SEC Proposes Change
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