Corporate Transparency Act Enforced : Federal Court Halts Enforcement

The Securities and Exchange Commission (SEC) recently announced new rules that go into effect in November 2021, impacting proxy advisory firms. These firms provide recommendations to investors on how to vote on matters being considered at companies’ annual meetings.

Under the new rules, proxy advisory firms will be required to provide companies with their voting recommendations at the same time they are provided to investors. This is a change from the current practice, where companies receive the recommendations shortly before they are sent to investors.

The SEC has said that this change will help ensure that companies have enough time to review and respond to the recommendations before they are distributed to investors. This is seen as a way to improve the accuracy and reliability of the information being provided to investors.

Proxy advisory firms will also be required to disclose any conflicts of interest that may exist in their recommendations. This includes any financial or other relationships they have with the companies they are providing recommendations on.

Overall, these new rules are aimed at increasing transparency and accountability in the proxy advisory industry. By giving companies more time to review recommendations and requiring disclosure of conflicts of interest, the SEC hopes to improve the integrity of the voting process for shareholders.

Investors should be aware of these changes and consider how they may impact their decision-making process when it comes to voting on company matters. By staying informed and understanding the new rules, investors can make more informed decisions that align with their values and objectives.