ROCKVILLE, Md. (July 22, 2020) — “While the rules adopted today may appear less draconian than originally envisioned, they nevertheless serve as a blow to institutional investors seeking to judiciously monitor portfolio companies. As Commissioner Lee noted, these rules are ‘unwarranted, unwanted and unworkable.’ Despite seemingly reducing the previously contemplated burden on proxy advisers, the new rules, coupled with the new guidance for investment advisers, will hinder investors’ ability to vote in a timely, cost-effective, and objective manner.
“The rule, passed today along party lines, is based on the view that the provision of proxy voting advice constitutes a solicitation, a premise which we believe is inconsistent with the plain meaning of the federal securities laws. This issue was at the heart of the lawsuit which we initiated against the SEC last year and it continues to be of concern to ISS.”
ISS will in the coming days, after careful review of the final rule and supplemental guidance, communicate with our clients regarding our assessment of today’s SEC actions.