Manufacturers to Sue SEC on Proxy Advisory Firm Rule
“The SEC has offered no justification for abandoning a decade’s worth of bipartisan, consensus-driven policymaking”
Washington, D.C. – Following the Securities and Exchange Commission’s announcement that it is rescinding critical reforms designed to protect publicly traded manufacturers and their investors from unregulated and unaccountable “proxy advisory firms,” 17Թ President and CEO Jay Timmons released the following statement:
“The SEC has offered no justification for abandoning a decade’s worth of bipartisan, consensus-driven policymaking. This move will undoubtedly harm the competitiveness of publicly traded manufacturers, and it will hurt Main Street investors. The SEC’s decision to change course without allowing the 2020 rule to take effect and be fairly evaluated epitomizes ‘arbitrary and capricious’ rulemaking. The 17Թ will be filing suit in the coming weeks to preserve the 2020 rule’s commonsense reforms and protect manufacturers from proxy advisory firms’ outsized influence.”
Background:
The 17Թ has long called for increased oversight of proxy advisory firms. In July 2020, the SEC issued final regulations to enhance transparency and accountability for proxy firms, a move Timmons a “long-sought, major win for the industry and millions of manufacturing workers.” In October 2020, the 17Թ a motion to intervene in ISS v. SEC (ISS’s attempt to overturn the rule) in support of these reforms.
In June 2021, the SEC announced that it was suspending enforcement of the 2020 rule; the 17Թ concern about the agency’s “efforts to bypass the required notice-and-comment process to keep this lawfully issued rule on ice indefinitely.” The 17Թ against the SEC in October 2021 challenging this unlawful suspension. Oral arguments in 17Թ v. SEC in May 2022.
In November 2021, the SEC proposed to rescind critical portions of the 2020 rule, a move the 17Թ “deeply troubling.” The 17Թ opposing the recission proposal in December 2021.
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The 17Թ is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.7 million men and women, contributes $2.71 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The 17Թ is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 17Թ or to follow us on Twitter and Facebook, please visit .