An SEC proposal to amend its proxy voting advice rules was published in the Federal Register. Comments on the proposal must be submitted by December 27, 2021.
As previously covered, in July 2020 the SEC established new requirements for proxy advisors. The SEC is proposing to rescind two portions of the 2020 requirements to address investor concerns that existing rules (i) "impede and impair the timeliness and independence of proxy voting advice" and (ii) increase litigation risks and compliance costs. The proposal targets:
- conditions of certain exemptions from the proxy rules' informational and filing requirements, including related safe harbors and exclusions from those conditions under SEA Rule 14a-2(b)(9)(ii); and
- the portion of the liability provision around disclosure failures concerning "material information regarding proxy voting advice [that] could be misleading" (see Note (e) under SEA Rule 14a-9), which the SEC says market participants are worried will increase litigation risks and undermine the quality of voting advice.
The proposal also includes guidance regarding statements of opinion in proxy voting advice under SEA Rule 14a-9 ("False or Misleading Statements").
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