SEC Finalizes Rule Amendments Governing Proxy Advisors

The SEC finalized amendments designed to improve the accuracy and transparency of information provided by proxy advisory firms.

Under the final rule, the SEC amended:

• SEA Rule 14a-1(l) ("Definition") by (i) expanding the definitions of "solicit" to generally include the provision of proxy voting advice, (ii) clarifying the circumstances in which a proxy advisor is engaged in a solicitation, and (iii) providing that a person's proxy voting advice in response to an "unprompted request" is not considered to be a solicitation;
• SEA Rules 14a-2(b)(1) and 14a-2(b)(3) ("Solicitations to Which § 240.14a-3 to § 240.14a-15 Apply") by (i) establishing conditions that a proxy voting advice business must satisfy in order to rely on exemptions from information and filing requirements and (ii) providing "non-exclusive safe harbors" that a proxy voting advisor may rely upon to benefit from the exemptions; and