Jay Clayton is Chairman of the U.S. Securities and Exchange Commission. This post is based on Chairman Clayton’s recent statement at an Open Meeting on Commission Guidance and Interpretation Regarding Proxy Voting and Proxy Voting Advice, available here. The views expressed in this post are those of Mr. Clayton and do not necessarily reflect those of the Securities and Exchange Commission or its staff.
Congress assigned to the Commission the responsibility to regulate the proxy solicitation process in 1934. Voting proxies is important. When we meet with market participants, we consistently hear about the importance of engagement, and the voting process is a key component of that engagement. This is made clear in many ways, including that our proxy rules regulate how proxies can be solicited and what information must be disclosed. Those rules impose significant anti-fraud liability on statements which, at the time and in the light of the circumstances under which they are made, are false or misleading with respect to any material fact. No other country comes close in terms of providing and enforcing this level of investor protection around the proxy voting process. Further, in the context of a share-for-share merger subject to a shareholder vote, we impose additional liability under the Securities Act of 1933 on registrants and officers and directors for the information in the associated registration statement.
In the past two decades, the proxy process has become one of increasing complexity, and also importance, to investors, issuers, and investment advisers. Commission rule changes, state law changes, corporate governance practices, technology and other factors have all increased the significance of shareholder voting in our public capital markets. This is one reason why the Commission and its staff have prioritized our work in this area. During this time, investment advisers have assumed a much greater role in our marketplace and, consequently, a greater role in the area of shareholder-company engagement. For example, there are now over 13,000 SEC-registered investment advisers with over $84 trillion in assets under management, and over 8,000 of these investment advisers provide services to retail investors.
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