Northern Trust

Coming off autopilot: The SEC issues guidance on investment advisers’ proxy voting responsibilities


By Northern Trust – After a November 2018 roundtable on the proxy process, the SEC has begun issuing guidance around the use of proxy advisors.  This promises to be the beginning of the SEC’s scrutiny into proxy voting, not the end.

Prior to Jay Clayton assuming the Chairmanship of the Securities and Exchange Commission (SEC) in May 2017, proxy voting had been a periodic item of SEC interest that failed to garner significant attention. A 2010 SEC concept release, 2013 roundtable, and 2014 staff legal bulletin generated little industry action.  That is changing now that Chairman Clayton made it a priority to review the role of proxy advisory firms in the voting process.  The review began in full with a November 2018 SEC roundtable and now has produced two SEC guidance releases.

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