Proxy Adviser Disclosure Required

New SEC guidance requires the disclosure of any conflicts of interest when the organization furnishes voting advice.

Companies that recommend to investors how to vote in corporate elections must disclose conflicts of interest that could be viewed as affecting their advice, the U.S. Securities and Exchange Commission (SEC) said.

The SEC guidance released yesterday responds to concerns of the U.S. Chamber of Commerce and other critics of proxy advisers, whose recommendations can influence the outcome of elections on executive pay and boards of directors. Proxy advisers such as Institutional Shareholder Services Inc. also consult for some companies that are the subject of their voting recommendations.

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