Top U.S. corporate lobby sues Wall Street regulator over proxy rules

Top U.S. corporate lobby sues Wall Street regulator over proxy rules

Summary : The top U.S. corporate lobby group filed a lawsuit on Thursday against Wall Street’s regulator over the agency’s recent vote to rescind rules that critics said impeded the independence of firms that advise investors on how to vote in corporate elections. The move by the SEC earlier this month was the latest in a long-running battle over how to regulate proxy advisers like Institutional Shareholder Services and Glass Lewis, which advise investors how to cast their ballot on issues including the election of directors, merger transactions and shareholder proposals.

“However, the SEC’s recent actions will deteriorate the public company model, ultimately depriving main street investors and everyday Americans dynamic growth opportunities to help build wealth and save for retirement.”

The agency’s recent rules specifically rescind two exemptions, introduced under former President Donald Trump, including a requirement that proxy advisers provide a first look to corporations of the advice to be placed on the agenda.

The Wall Street regulator, whose composition has changed under President Joe Biden, first proposed these rule changes in November and said investors had expressed concerns that the conditions created increased compliance costs for proxy advisers and impaired the independence and timeliness of their advice.