Sec. 401. Study of certain issues with respect to proxy advisory firms and the proxy process
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Section 4 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78d ) is amended by adding at the end the following: Not later than 180 days after the date of the enactment of this subsection, and every 5 years thereafter, the Commission shall conduct a comprehensive study on proxy advisory firms and the proxy process. The studies required under paragraph
(1)shall cover— the previous 10 years, with respect to the initial study; and the previous 5 years, with respect to each other study. Each study required under paragraph
(1)shall address the following issues: The financial and other incentives and obligations of all groups involved in the proxy process. A consideration of whether financial and other incentives have created a process that no longer serves the economic interests of retail investors. An analysis of whether regulations and financial incentives have created and protected the outsized influence of proxy advisors or a duopoly in proxy advice, and if so, what are the benefits and costs of that outsized influence or duopoly. The costs incurred by issuers in responding to politically-, environmentally-, or socially-motivated shareholder proposals. An analysis of the impact that shareholder proposals have on discouraging private companies from going public. A thorough assessment of the economic analysis, if any, conducted by proxy advisory firms and institutional shareholders when recommending or voting in favor of shareholder proposals. A review of the extent to which institutional investors, who owe fiduciary duties, rely on proxy advisory firm recommendations. An assessment of whether, in light of their significant influence on corporate actions and vote outcomes, proxy advisors are subject to sufficient and effective regulation to ensure that their policies and recommendations are accurate, free of conflicts, and benefit the best economic interest of shareholders at large. At the completion of each study required under paragraph
(1)the Commission shall issue a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that includes the results of the study. .
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Sec. 401
Study of certain issues with respect to proxy advisory firms and the proxy process
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