With the past year almost over and a new one about to begin, its time to take a look back and take stock of what was accomplished in 2018 and what issues remain. The past 12 months found major developments involving standards of care for advisers and broker-dealers, the emergence of an SEC strategy regarding cryptocurrencies, a full year in office for a new SEC team and philosophy, the rising challenges of cybersecurity, and more.
Stay away from proxy advisory firms and focus instead on repairing proxy infrastructure. That was the message the Investment Adviser Association sent in a letter this month to the Senate Banking Committee, which on the same day held a hearing on issues related to a bill that, if passed, would require proxy advisory firms to register with the SEC as investment advisers, meaning they would be subject to agency regulation.
The role of proxy advisory firms returned to center stage in recent days following an SEC roundtable that raised questions about the influence such firms have over advisers and funds, conflicts of interest, whether proxy advisers should be regulated, and more. As with a similar roundtable five years ago, viewpoints were aired, with questions remaining about what actions, if any, might be taken at some future date.
The SEC on September 13 did something unexpected: It pulled two 2004 Division of Investment Management no-action letters concerning advisers use of proxy advisory firms in preparation for a planned November roundtable on the subject. What made the move unusual was not that the agency decided to supersede the letters, but that it did so by actually removing them, rather than simply issuing new guidance indicating a change of course.
Advisers use of proxy advisory firms, including the degree to which advisers follow proxy advisers recommendations when they vote, will again come before the SEC, as part of a planned roundtable on the proxy process this fall. Whether any changes will result is another matter.
The SEC has once again dipped its toe into the recently churned waters of proxy advisory firms and proxy voting - and is this time providing some answers.
Judging by the diversity of opinions on the issue, the SEC may need the equivalent of a proxy advisory service to help it decide whether proxy advisory service reform is necessary and, if so, just what should be done.There were certainly no conclusions reached at an SEC roundtable December 5 attended by 18 industry participants, […]
Concerns about conflicts of interest, failure to conduct adequate research and outsized influence have dogged the use of proxy advisory firms by institutional investors and investment advisers for several years. These questions will likely get a full airing December 5 at an SEC public roundtable. The forum should be welcome news to SEC Commissioner Daniel […]
The increased use of proxy advisory firms by investment advisers and large institutional investors to help them cast corporate governance ballots may result in votes not based on fiduciary duty, according to one SEC Commissioner. The last thing we should want is for investment advisers to adopt a mindset that leads to them blindly casting their […]
A few weeks ago, the 400-plus compliance professionals who participated in the 2009 Investment Management Compliance Testing Survey (co-sponsored by ACA Insight, ACA Compliance Group, the Investment Adviser Association, and Old Mutual) were asked to identify the “hottest” compliance topics. They ranked “proxy voting” dead last. That, we predict, is about to change. On May […]