U.S. SEC to consider new guidance on investor use of proxy advisors By Reuters

By Jessica DiNapoli

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Tuesday said it would hold a meeting next week on whether to publish new guidance regarding the responsibilities of investors when relying on so-called proxy advisors.

The proposal comes amid a push by the corporate lobby to rein in proxy advisors, which recommend how investors should vote in corporate elections on issues like pay and diversity. Groups representing listed companies claim the current SEC rules have allowed special interests to hijack boardrooms with costly demands.

Shareholder proposals on charged issues like gun rights and climate change have taken on a higher profile since the 2007-2009 financial crisis as a mechanism for better corporate oversight.

The move could set the SEC up for a clash with investors, who worry the agency is siding with companies to diminish voting rights.

The SEC said in a notice published on its website that the agency will “consider whether to publish” the new guidance at Wednesday’s meeting, but did not specify what the guidance would be.

However, three people with knowledge of the matter told Reuters they expected it to clarify that investors do not have to submit votes for every share they own – a misconception that has allowed proxy firms to gain significant influence, say their critics.

The guidance is also expected to outline how investors should monitor their use of proxy advisors and ensure they are actually voting the way investors designate.

Investor groups and proxy advisory firms have said they worry any new guidance could ultimately make it more difficult for proxy advisory firms to provide timely, independent and cost-effective research for investors.

A spokeswoman for the SEC declined to comment beyond Wednesday’s notice.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button