The SEC’s Evolving Posture Toward Proxy Advisors: What It Will Mean for the Upcoming Proxy Season

    View Author November 2019
    On August 21, 2019, the US Securities and Exchange Commission (SEC) issued new guidance regarding the role of proxy advisors in the proxy voting process. This guidance is expected to play an important role in the upcoming 2020 proxy season, as the SEC seeks to further define the proxy voting obligations of registered investment advisors while promoting greater accountability on the part of the proxy advisory firms.

    The SEC’s August guidance was followed by an announcement on November 5, 2019 of proposed rules governing proxy advisors and their investment advisor clients. These rules are, in the words of the SEC, intended to “improve [the] accuracy and transparency of proxy voting advice.” If adopted, the proposed rules would significantly alter the manner in which proxy advisors interact with both issuers and investment advisors.