FILE PHOTO: People exit the headquarters of the U.S. Securities and Exchange Commission in Washington, D.C.

US SEC set to roll back Trump-era restrictions on shareholder advisers

The rule change is the latest in a long-running battle over how to regulate corporate shareholder services and “proxy” advisers like Klaus Lewis, which advise investors on how to vote on matters such as directors, board of directors, merger transactions and shareholder proposals.

These companies have amassed too much influence in corporate elections and should be tightly regulated, the companies say.

In 2020, the Securities and Exchange Commission (SEC) introduced rules that increase the legal liability of proxy advisors and require them to share their recommendations with corporate executives early on. Investor advocates said the changes tipped the balance in favor of corporate investors at the expense of investors.

On Wednesday, Chairman Joe Biden’s SEC is expected to repeal both rules. When the rule change was first proposed in November, the SEC said investors raised concerns that the regulations would create increased compliance costs for proxy advisers and undermine independence and the scope of their advice.

Changes in legal responsibilities have created confusion and increased litigation risks for proxy advisers, which can affect the quality of advice, he said.

ISS and Klaus Lewis declined to comment on Tuesday.

The SEC is expected to vote on the issue at 10 a.m. ET.

Check Also

Olympic Champion Andy Murray

Former Olympic Champion Andy Murray Set to Miss Out on 2024 Games

Triumphing in 2012 and 2016, Andy Murray became the first tennis player of any gender …

Leave a Reply

Your email address will not be published. Required fields are marked *