On July 22, 2020, the SEC announced the adoption of what will likely be controversial amendments to the rules governing proxy advisory firms. The amended rules will, among other things:
- codify and clarify the SEC’s “longstanding” view that proxy voting advice is generally a “solicitation”; and
- provide exemptions from the information and filing requirements of the proxy rules if the proxy advisor:
- provides conflicts of interest disclosure; and
- discloses written policies and procedures to (1) provide companies with proxy voting advice no later than the time it is provided to the proxy advisor’s clients, and (2) provide the proxy advisor’s clients “a mechanism by which they can be reasonably be expected to become aware” of a company’s written statements regarding the proxy advice “in a timely manner” prior to the shareholder meeting
The amendments provide non-exclusive safe harbors for proxy advisors, one of which would require companies to file definitive proxy materials at least 40 days prior to the shareholder meeting and to limit the use and distribution of the advice.
The amendments also provide examples of when certain information in proxy voting advice could be deemed misleading.
Please direct any questions or observations to Gunster securities law and corporate governance practice leader Bob Lamm.
Yes! Please sign me up to receive email alerts from other Gunster practice areas.
This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
About Gunster
Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 13 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Naples, Orlando, Palm Beach, Stuart, Tallahassee, Tampa Bayshore, Tampa Downtown, Vero Beach, and its headquarters in West Palm Beach. With more than 280 attorneys and consultants, and over 290 committed professional staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.
