SEC Adopts New Rules for Proxy Advisors and Provides Supplemental Guidance on Voting Responsibilities of Investment Advisers: Proxy Advisors Required to Provide Notice of Company Responses to Recommendations and Comprehensive Disclosure of Conflicts of Interest

Sullivan & Cromwell LLP - July 28, 2020

On July 22, the SEC amended its proxy solicitation rules to provide clients of proxy voting advice businesses, such as ISS and Glass Lewis, with “reasonable and timely access to more transparent, accurate and complete information on which to make voting decisions.” Simultaneously with these amendments, the SEC also supplemented its August 2019 guidance on the relationship between an investment adviser’s exercise of voting authority on behalf of its clients and its fiduciary duty and other obligations under the Investment Advisers Act of 1940. Our memo summarizes the key changes from the new rules and supplemental guidance.