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SEC’s Corp Fin and IM Issue Proxy Voting Guidance

In conjunction with its Division of Corporation Finance (“Corp Fin”), the U.S. Securities and Exchange Commission’s (“SEC”) Division of Investment Management (“IM”) recently issued Staff Legal Bulletin No. 20, Proxy Voting: Proxy Voting Responsibilities of Investment Advisers and Availability of Exemptions from the Proxy Rules for Proxy Advisory Firms. In their respective roles, IM offers guidance for investment advisers’ responsibilities in voting client proxies and preserving proxy advisory firms, and Corp Fin provides guidance on the accessibility and obligations of two federal proxy rule exemptions that are often used by proxy advisory firms.

The guidance reflects proxy advisory firms’ ability to advise shareholders on corporate ballots, and mandates such advisers to improve disclosures concerning possible conflicts of interest. Also, to ensure proxies are voted in the investor clients’ best interests, investment advisors will be required to evaluate their proxy policies on an annual basis.

Although considered a representation of the Corp Fin and IM’s staff views, the issued bulletin is not considered a rule, or official statement of the SEC. Additionally, the bulletin’s content has been neither approved nor disapproved by the SEC. To view Staff Legal Bulletin No. 20, click here.

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