Specifically, the SEC proposed rescinding amendments approved last year that allow companies that are the subject of voting advice to be able to access that advice prior to or at the same time as the advice is disseminated to clients, and another requiring proxy-advisory firms to provide clients with access to any response the company provides on voting advice before those clients vote.
In June, Chairman Gary Gensler asked the agency's staff to consider recommending further regulatory action on the issue, and the division of corporation finance said it would not recommend enforcement actions related to 2020 rule-making.
Commissioner Elad L. Roisman voted against the proposal and said it's poor precedent for the commission to "overturn thoughtfully developed regulation so lightly."
Many in the business community, including Tom Quaadman, executive vice president of the U.S. Chamber's Center for Capital Markets Competitiveness, supported the 2020 rule-making and disapproved of the SEC's vote Wednesday.
"If the SEC decides to roll back these rules, it will signal that it is not serious about rooting out and eliminating misinformation and conflicts of interest in the proxy process and will instead place special interests at the head of the line, harming investors and markets," Mr. Quaadman said in a statement.
Nichol Garzon-Mitchell, senior vice president and general counsel at proxy advisory firm Glass Lewis, welcomed the SEC's action.
"We appreciate the work done by the new leadership at the SEC to revisit this important issue," Ms. Garzon-Mitchell said in a statement. "The 2020 proxy advice rules were unnecessary and only threatened to delay and harm the objectivity of the proxy advice that institutional investors depend on."
The proposal will have a 30-day public comment period following its publication in the Federal Register.
In a separate 4-1 vote Wednesday with Commissioner Hester M. Peirce dissenting, the SEC adopted new universal proxy rules.
The rule changes will give shareholders the ability to vote by proxy for their preferred combination of board candidates, similar to voting in person.
The final rules require all parties in a contested board election to provide shareholders with a proxy card that includes the names of all registrant and dissident nominees. The rules will apply to all non-exempt solicitations for contested elections other than those involving registered investment companies and business development companies.
Compliance with the rules related to universal proxy cards will be required for any shareholder meeting involving contested director election held after Aug. 31, 2022, the SEC said.
