The US Securities and Exchange Commission said on Tuesday it would not enforce Trump-era rules for shareholder advisory firms, cracking down on companies such as ExxonMobil, which claim proxy advisers are too powerful.
In the statement, the chairman of the commission Gary Gensler he said He asked the agency staff to review the restrictions on proxies advised by the commission Adopted in July 2020“Staff should review guidelines for removing proxies’ advisers The agency was published in 2019, he said.
The SEC he said “It will not offer enforcement action,” based on the agency’s 2019 Guidelines for Advisors և 2020. On the rules, now that the commission is “discussing further regulatory action in this area.”
Gensler’s decision benefits institutional shareholder services և Glass Lewis, two major proxy consulting firms. State-owned companies representing the Business Roundtable և US Chamber of Commerce lobbied the SEC to regulate proxies’ advisers.
But investors who use proxies’ advice to vote on corporate council meetings’s encouraged the SEC to act.
“June is Christmas Eve for investors,” said Amy Borrus, executive director of the Institutional Investors Board. “SEC President Gensler’s decision that the agency should consider advising the proxy to reconsider its controversial actions is of great benefit to investors, proxies’ advisory firms, which would be constrained by the regulatory regime established in the previous administration.”
The ISS has sued the SEC to end its rule և 2020. Rules և that case is still in court. The oral arguments are scheduled for June 7. It is assumed that the regulations of the SEC Proxy Advisor will replace ISS և Glass Lewis with new legal costs.
“We welcome the decision of the SEC to consider reviewing the rules of its proxy adviser”, ISS he said in the announcement.
ISS և Glass Lewis advises investors on how to vote on corporate issues ranging from climate change discovery to board selection և their suggestions can be influential.
Respectively ISS և Glass Lewis confirmed Three և two ExxonMobil board nominees nominated by activist hedge fund engine No. 1 last week. It was confirmed that at least two of the nominees received seats.
In a letter to the SEC in 2020, Exxon also stated that it supports the agency’s charter of proxies.
Dennis Keleher, chairman of the Better Markets Advocacy Group, said: “Trump’s actions of the SEC were wrong, they were probably illegal. Given that the SEC exists to protect investors rather than the current administration, today’s actions properly begin the process of restoring investor rights and equipping investors.