SEC Issues Staff Guidance on Rules Applicable to Investment Advisers and Proxy Advisory Firms

On June 30, the Divisions of Investment Management and Corporation Finance of the SEC issued staff guidance, in the form of a Staff Legal Bulletin, addressing investment advisers’ responsibilities in voting client proxies and retaining proxy advisory firms. The guidance also addresses the requirements of the exemptions from the federal proxy rules that proxy advisory firms may seek to satisfy. As described in our alert memo, we believe that certain aspects of the interactions between issuers, investors, investment advisers and proxy advisory firms will change as a result of the guidance, and that, over time, some of those changes could become meaningful.

Next week, we will participate in a webinar hosted by the Society of Corporate Secretaries and Governance Professionals to discuss the guidance. More information to come.