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SEC Reverses on Proxy Firm Rule

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The U.S. Securities and Exchange Commission has made an about-face on commonsense investor protections it adopted last year to provide appropriate oversight of so-called proxy advisory firms—and the NAM is pushing back.

The background: Last year, the NAM won a major victory when the SEC published a new rule to regulate proxy firms, which have significant influence over public company governance decisions and the performance of shareholders’ investments. Now under new leadership, the SEC has so far refused to enforce the rule—and yesterday, the commission issued a new proposal that would wipe out important progress.

What it means: The rule secured by the NAM ensured that investors would have access to more complete and accurate information before casting proxy votes. The SEC’s new proposal would reverse the rule’s requirements that proxy firms engage with public companies—specifically rescinding the provisions mandating that…

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