The U.S. Securities and Exchange Commission is expected to meet November 5 to consider changes to regulations that cover proxy advisory firms, following the guidance issued in August, The Financial Times has reported. Although few details are available, and no public announcement has been made, the Times reports that the Commission is expected to consider changes to the exemptions from the Investment Advisors Act that apply to proxy advisory firms.
The Times notes that the Commission "is expected to vote to propose rules that would require proxy adviser firms to give companies two chances to review proxy voting materials before they are sent to shareholders." This step, if included in the proposal, would parallel recommendations made by the Center in its comments to the Commission that all companies be allowed to review a draft of a proxy advisory firm report before it is issued and see the final draft in advance of publication allowing companies to prepare for shareholder engagement.
The SEC is also expected to propose updated to the shareholder proposal resubmission thresholds, the rules governing how much support a proposal needs to be offered again the following year. Currently a proposal needs to garner 3% the first year, 6% the second year and 10% the third year and thereafter to be offered the subsequent year.
The Center will provide updates as they become available and will engage Subscribers in preparing our comments when the SEC approves a proposal for comment.