17�Թ�����

Washington, D.C.–Yesterday, the U.S. Court of Appeals for the Fifth Circuit ruled in the 17�Թ�����’ favor in 17�Թ����� v. SEC, overturning the Securities and Exchange Commission’s rescission of critical provisions of its 2020 proxy advisory firm rule. 17�Թ����� Chief Legal Officer Linda Kelly released the following statement on the ruling:

“This decision confirms that federal agencies are bound by the rule of law, even as administrations change. Manufacturers depend on the SEC to be a steady regulatory hand at the wheel of America’s world-leading capital markets—an obligation the agency abandoned in rescinding the commonsense, compromise 2020 proxy advisory firm rule.

“The 17�Թ����� Legal Center is proud to have secured this critical victory, which strikes down the SEC’s unlawful about-face and preserves important provisions from the 2020 rule designed to protect manufacturers and Main Street investors from proxy firms’ outsized influence. We will continue to fight in court to uphold the 2020 rule—and to work with the SEC and with Congress to ensure appropriate oversight of these powerful actors.”

Background:

• The 17�Թ����� 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 17�Թ����� President Jay Timmons a “long-sought, major win for the industry and millions of manufacturing workers.” In October 2020, the 17�Թ����� a motion to intervene in ISS v. SEC (ISS’s attempt to overturn the rule) in support of these reforms—a case that is still ongoing in the U.S. Court of Appeals for the D.C. Circuit.
• In June 2021, the SEC announced that it was suspending enforcement of the 2020 rule; the 17�Թ����� against the SEC in October 2021 challenging this unlawful suspension. The U.S. District Court for the Western District of Texas in the 17�Թ�����’s favor in that case, vacating the SEC’s suspension of the rule.
• In July 2022, the SEC rescinded critical portions of the 2020 rule, a move that Timmons “epitomizes ‘arbitrary and capricious’ rulemaking”; the 17�Թ����� later to challenge the rescission. The Fifth Circuit decision overturns the SEC’s 2022 rescission of important provisions that increased transparency into proxy firms’ recommendations.

-17�Թ�����-

The 17�Թ����� 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 nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The 17�Թ����� 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 17�Թ����� or to follow us on Twitter and Facebook, please visit