The U.S. Securities and Exchange Commission (SEC) took aninitial step Wednesday to lay out the legal limitations of apowerful industry that’s known for questioning companies’ decisionson executive pay and business strategy.
SEC commissioners voted 3-2 at a meeting in Washington to issueguidelines for fund managers’ responsibilities in dealing withso-called proxy-advisory firms and clarifying that those firms’interactions with shareholders are generally covered by the SEC’srules.
The new guidance is expected to be the first of a series ofmoves the agency will take under Chairman Jay Clayton to rein infirms such as Institutional Shareholder Services Inc. (ISS) andGlass Lewis & Co., which are hired by mutual funds and othershareholders to give advice on voting in corporate elections.
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