This bill would require proxy advisory firms to register with the Securities and Exchange Commission (SEC) and subject them to certain rules and reporting requirements. Publicly traded companies are required to issue proxy statements to shareholders before voting on corporate actions — like electing company directors and approving compensation packages. Proxy advisory firms advise a variety of clients like pension plans, mutual funds, and other institutional investors which can influence their advice, so this bill would require such firms to disclose potential or actual conflicts of interest when providing services.
Proxy advisory firms would be required to disclose information about their financial and managerial resources to the SEC in addition to disclosing conflicts of interest to current or prospective clients.
The SEC would be required to report annually to Congress on its regulation of proxy advisory firms.