SEC Chair Jay Clayton outlined progress made on the agency's 2018 agenda, key initiatives planned for 2019 including review of the proxy process, and risks associated with Brexit, the LIBOR transition and cybersecurity.
In a recent speech, Chair Clayton stated that in 2019, the SEC intends to:
Mr. Clayton offered a number of observations about the proxy process, which will be a subject of review for the SEC in 2019. He noted a consensus among panelists at a recent SEC proxy roundtable that "the proxy 'plumbing' needs a major overhaul." Mr. Clayton opined that the SEC should review the ownership and resubmission thresholds for shareholder proposals, which has been $2,000 for the last 20 years. Mr. Clayton said the agency will look at clarification of the different responsibilities of proxy advisors and investment advisers and information as to proxy advisers' analytical and decision-making processes. He stated that some matters which are put to a shareholder vote should be analyzed on a company-specific basis, rather than a "more general market or industry-wide policy." Mr. Clayton also said that the SEC should consider (i) the existing structure for addressing conflicts of interest at proxy advisory firms, and (ii) whether investors have "effective access to issuer responses to information in certain reports from proxy advisory firms."
Mr. Clayton added that the SEC will continue to monitor risks to U.S. investors and markets arising from (i) the UK's exit from the European Union, (ii) the transition away from LIBOR, and (iii) cybersecurity breaches.
At a roundtable event, SEC Commissioners set the stage for market participants to discuss (i) proxy voting mechanics and technology, (ii) the shareholder proposal process and (iii) the role and regulation of proxy advisory firms.