On Monday, February 3rd, the comment period closed for the SEC’s proposed rules for proxy advisory firms and shareholder proposal submission eligibility requirements. Not surprisingly, the issue is generating heat. There were more than 1,200 individual comments submitted.
While there were several comments from institutional investors, the most vocal opponents of the proposed rules from the shareholder community have come from the activist hedge fund sector. That sector has a vested interest in proxy advisory firms remaining largely unregulated as supportive vote recommendations carry a financial benefit to their investment strategies.