U.S. Securities and Exchange Commission building in Washington, D.C. Jan. 5, 2019. Regulatory Instability for Proxy Advisory Firms
With its recent actions regarding the regulation of proxy advisory services, the SEC may have eviscerated more than the 2020 rules.
July 27, 2022 at 12:06 PM
7 minute read
Corporate Governance
The latest developments in the SEC regulation of proxy advisory firms are good news for ISS and Glass Lewis, but they are a disappointment for proponents of conscientious and consistent rulemaking. The 2020 updates to proxy advisory rules were the result of a thorough process that was conducted by Commission staff across 10 years and two politically distinct administrations, yet the framework implemented by the 2020 rules has been substantially gutted in the span of just a few months—without ever having taken effect. This unwelcome instability in the regulatory environment casts unfortunate doubt on the SEC's commitment to being a nonpartisan, market-oriented regulator. It is likely to create uncertainty regarding future rulemaking, as to proxy advisory services specifically and as to potentially controversial areas in general.
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