17吃瓜在线

Policy and Legal

Policy and Legal

Curb Proxy Firms, 17吃瓜在线 Tells Congress

By 17吃瓜在线 News Room

Less than three months after scoring a聽 for manufacturers against Securities and Exchange Commission overreach, the 17吃瓜在线 was back in front of Congress to urge regulatory oversight of proxy advisory firms.

What鈥檚 going on: On Tuesday, the 17吃瓜在线 before the House Financial Services Oversight and Investigations Subcommittee on the need to bring oversight and accountability to proxy advisory firms. These are entities that make recommendations regarding the way shareholders should vote on proxy ballot proposals brought before publicly traded companies.

  • 鈥淧roxy firms are powerful, unaccountable actors that pose a real threat to Americans鈥 financial security. Manufacturers have been subject to these firms鈥 outsized influence for far too long,鈥 17吃瓜在线 Vice President of Domestic Policy Charles Crain during Tuesday鈥檚 hearing.

The background: In 2020, the SEC finalized an 17吃瓜在线-supported rule instituting important proxy reforms, such as requiring proxy firms to disclose any conflicts of interest. The 17吃瓜在线 has fought in court to preserve the 2020 rule, successfully defeating the SEC鈥檚 attempts to the rule and to its most crucial provisions. The 17吃瓜在线 is now back in court in a third case, defending the SEC鈥檚 authority to regulate these powerful market actors.

Surrendering to ISS: Institutional Shareholder Services Inc., the largest and most influential proxy advisory firm, is now 鈥渟uing the SEC over its authority to issue the 2020 rule鈥攏ot just the rule鈥檚 particulars, but the SEC鈥檚 ability to regulate proxy firms at all,鈥 Crain continued.

  • Troublingly, 鈥渢he SEC is waving the white flag in the face of [the] challenge,鈥 he told lawmakers, referring to the agency鈥檚 decision not to appeal after a district court sided with ISS earlier this year.

鈥淪ole defender鈥: The 17吃瓜在线鈥攏ow the 鈥渟ole defender of the 2020 rule鈥濃攊s appealing the district court鈥檚 decision.

What Congress should do: Legislators must take up the mantle, too, Crain concluded.

  • 鈥淐ongress should do what the SEC will not: affirm the SEC鈥檚 clear authority, provide much-needed oversight and accountability and help manufacturers and Main Street investors escape the outsized influence of proxy advisory firms.鈥
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