SEC Adopts Amendments to Proxy Voting Advice Rules

The Securities and Exchange Commission (SEC) has adopted amendments that rescind two rules applicable to proxy voting advice businesses (PVABs) that were adopted in 2020. The 2020 rule imposed conditions on the availability of two exemptions from the proxy rules’ information and filing requirements. Those conditions require that

  • Registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner, and
  • PVAB clients are provided with a means of becoming aware of any written responses by registrants to proxy voting advice

Stakeholders expressed concern that these conditions increase compliance costs and impair the independence and timeliness of their proxy voting advice. The final amendments remove those requirements. The 2020 Supplemental Proxy Voting Guidance that was prompted by these conditions was also rescinded.

Additionally, final amendments delete the “Note (e)” requirement which set forth examples of material misstatements or omissions related to proxy voting advice. It was determined that this requirement created confusion regarding the proxy rules liability provision, and the final rule removes this requirement and affirms that proxy voting advice generally is subject to liability under the proxy rules.

This guidance will become effective 60 days after publication in the Federal Register.