SEC Proposes New Rules on Proxy Voting Advice and Shareholder Proposals
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Key takeaways:
- On November 5, 2019, the U.S. Securities and Exchange Commission (the “SEC”) proposed amendments to its rules on proxy voting advice and shareholder proposal submissions.
- The proposed amendments to the rules on proxy voting advice would (1) impose additional disclosure and procedural requirements on proxy advisory firms and (2) codify the SEC’s recent interpretation that proxy voting advice generally constitutes a “solicitation” under the federal proxy rules and guidance on when the failure to disclose certain information in proxy voting advice may be considered misleading.
- The proposed amendments to the rules on shareholder proposal submissions would (1) increase the ownership threshold for submission and resubmission of shareholder proposals, (2) impose additional procedural requirements on shareholders proposing submissions and disclosure requirements on shareholders proposing submissions through representatives and (3) limit the number of shareholder proposal submissions a single person can make directly or indirectly.