The Financial Post reports in its Thursday edition that the U.S. securities regulator voted on Wednesday to rescind rules introduced under former president Donald Trump that critics said impeded the independence of firms that advise investors on how to vote in corporate elections.
A Bloomberg dispatch to the Post says that the move is the latest instalment in a long-running battle over how to regulate proxy advisers like ISS and Glass Lewis, which advise investors how to cast their ballot on issues including the election of directors, merger transactions and shareholder proposals.
The Securities and Exchange Commission's five-member panel voted 3-2 to adopt the rule changes.
Corporations say the advisory companies have amassed too much sway over corporate elections and should be more tightly regulated.
In 2020, the SEC introduced rules that increased proxy advisers' legal liability and required them to share recommendations early on with corporate executives. Investor advocates said the changes tilted the scales in favour of corporate bosses over investors. The changes also remove a footnote that provides examples of instances of liability, which the agency said created confusion and uncertainty.
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