WASHINGTON, D.C.—Following Better Markets’ recommendations in its December 2021 comment letter, today the SEC rescinded provisions of a 2020 rule that stifled the availability of independent and timely advice for shareholders exercising their proxy voting rights. Legal Director and Securities Specialist Stephen Hall issued the following statement on the rule:
“The SEC’s rule is a victory for investors and their ability to receive independent and timely advice about upcoming proxy votes that elect corporate leaders and shape corporate policy. The provisions in the Trump-era rule were contrary to the public interest and received staunch opposition from all but corporate management and their allies. Moreover, the rulemaking record for the Trump-era rule was actually corrupted by comment letters claiming to be from Main Street investors but actually sent on behalf of corporate interest groups.
“Today’s rule removing the shackles from proxy advisory firms will benefit investors and the public interest. Proxy advisors provide vast numbers of shareholders with independent advice and analysis that is untainted or spun by the inherently biased management of a company. It is no surprise that corporate management finds proxy advisory firms to be a thorn in their side. Silencing proxy advisory firms has been on the wish-list of many corporate executives and their trade association and lobbying organizations for years. Unfortunately, prior SEC leadership during the Trump administration sided with corporate interests instead of investors.
“The SEC is entirely justified in revising the flawed 2020 rule and we applaud it for taking this important corrective action.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.