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SEC close to weighing possible action on proxy advisory firms

“The Securities and Exchange Commission will soon review recommendations for possible regulatory action targeting proxy advisory firms, SEC Chair Mary Jo White said on Wednesday.”

“White did not offer any details on what kinds of new rules or changes could be in store for proxy advisory firms like Glass Lewis and Institutional Shareholder Services, which help large institutional investors weigh how to vote on critical company issues such as board elections and compensation.”

“The SEC previously held a roundtable about the sector, where stakeholders discussed a variety of concerns such as whether the firms properly disclose potential conflicts of interest and whether investment advisers too heavily rely on their advice when they vote on behalf of clients.”

“Without signaling what the SEC might do, White, speaking to an audience at the U.S. Chamber of Commerce, said that she was "particularly" interested during the roundtable in hearing the discussions about improving disclosure of possible conflicts and about how much investment advisers rely upon proxy advisory firms and what this means for their fiduciary obligations.”

“The U.S. Chamber of Commerce has been among the most vocal in pressing the SEC to reform the proxy advisory sector.”

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Read full Reuters article here.

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