The US Securities and Exchange Commission (SEC) is actively reconsidering its position on the applicability of its proxy rules to proxy voting advice.

Background -

In July 2020, the SEC adopted amendments to its proxy solicitation rules in order to enhance the transparency, accuracy and completeness of the information that proxy advisors, such as Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co., provide to investors and others who vote on behalf of investors (Amendments). The Amendments codified the SEC’s 2019 guidance and interpretation that voting advice produced by proxy advisors generally constitutes a solicitation under the proxy rules and that the failure to disclose material information regarding proxy voting advice could cause such advice to be misleading in violation of the proxy rules (Guidance). These provisions of the Amendments became effective on November 2, 2020. As a transition period, proxy advisors were given until December 1, 2021, to comply with new conditions to exemptions from the proxy rules’ information and filing requirements that were adopted as part of the Amendments. (For more information about the Amendments, see our Legal Update, “SEC Adopts Proxy Voting Advice Rule Amendments,” dated July 28, 2020.1 ).