SEC Adopts Amendments To Its Proxy Solicitation Rules

On July 22, 2020, the Securities and Exchange Commission (the “SEC”) voted to adopt amendments to its rules governing proxy solicitations.  These amendments are threefold:   

1.    they require proxy voting advice businesses to adopt written policies and procedures designed to ensure that the proxy voting advice is made available to registrants;

2.    they require proxy voting advice businesses to adopt written policies and procedures designed to ensure that they provide clients with a mechanism by which the clients can reasonably be expected to become aware of a registrant’s views about the proxy voting advice; 

3.    they codify the SEC’s interpretation that proxy voting advice generally constitutes a solicitation within the meaning of the Securities Exchange Act of 1934 and thus clarify that the failure to disclose certain information in proxy voting advice may be considered misleading within the meaning of the antifraud provision of the proxy rules. 

The SEC hopes that these amendments “facilitate the ability of those who use proxy voting advice—investors and others who vote on investors’ behalf—to make informed voting decisions without imposing undue costs or delays that could adversely affect the timely provision of proxy voting advice.”