Statement from Institutional Shareholder Services on New SEC Rules for Proxy Advice

ROCKVILLE, Md. (July 13, 2022) “While we applaud the Commission for removing some of the 2020 rule’s more draconian provisions, the rule should have been rescinded in its entirety.  As investors and their representatives made abundantly clear in two rounds of public comments, the proxy rule is a solution in search of a problem. Today’s action misses the mark by failing to address the most critical defect; namely, the reclassification of proxy advice provided in a fiduciary capacity as proxy solicitation. We firmly believe the Commission’s decision to regulate a form of independent investment advice as though it were a solicitation of a specific outcome in a shareholder vote exceeds the agency’s statutory authority, is contrary to law, and is arbitrary and capricious. That is why we filed our suit challenging the 2020 rule and the 2019 guidance on which the rule was based. Oral arguments in the case are scheduled for late this month.”