Investor Groups Not Happy With Proxy Advisory Revamp

Investor Groups Not Happy With Proxy Advisory Revamp
Evan Agostini/Invision/AP

SEC commissioners approved sweeping changes to rules governing proxy advisory firms that were criticized by investor groups but applauded by the business community. The rule amendments, which passed in a 3-1 vote July 22, make clear that proxy voting advice generally constitutes a solicitation; requires proxy advisory firms to disclose conflicts of interests to clients; allows companies that are the subject of voting advice to be able to access that advice "prior to or at the same time as the advice is disseminated to clients"; and obliges proxy advisory firms to provide clients with access to any response the company provides on voting advice "in a timely manner before those clients vote," said Commissioner Elad L. Roisman, who spearheaded the commission's efforts on this issue.

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