SEC Investor Advocate Cautions against New Regulations on Proxy Advisors

SEC Investor Advocate Rick Fleming called on the SEC to refrain from imposing new regulations on proxy advisors.

In a speech at the "SEC Speaks" Conference, Mr. Fleming said proxy advisors have given asset managers an "efficient way to exercise much closer oversight" of the companies in their portfolios and the companies "don't like it." He said that the SEC should not prioritize creating a rule that could potentially affect the independence of proxy advice. He noted that while some people have criticized proxy advisors, investors who are paying for this service are not the ones expressing such concerns.

According to Mr. Fleming, investors have "reasons to hope" for forthcoming positive developments on (i) the SEC's transaction fee-and-rebate pilot, (ii) enhanced dark pool disclosure rules, (iii) restrictions on the trading of securities with little information about the issuer available, (iv) revisions to penny stock rules, and (v) the modernization of transfer agent rules.