Frank M. Placenti is partner at Squire Patton Boggs LLP. This post is based on a Squire Patton Boggs memorandum by Mr. Placenti and Sarah Wolf Ruest.
Executive Summary
On August 21, 2019, the U.S. Securities and Exchange Commission (the “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 Commission further defines the voting obligations of registered investment advisors and seeks to promote greater accountability on the part of the proxy advisory firms.
This guidance was followed by an announcement on November 5, 2019 of proposed rules governing proxy advisors and their investment advisor clients. These proposed rules were, in the words of the SEC, intended to “improve [the] accuracy and transparency of proxy voting advice.” If adopted, the proposed rules would represent a complete sea change in the manner in which proxy advisors interact with both issuers and investment advisors.