On November 20, 2018, WLF contributed to the docket of a Securities and Exchange Commission roundtable on the proxy voting process for public-company annual meetings. The roundtable focused in part on the role of professional firms that advise institutional money-manager and investment-adviser clients on how they should vote on shareholder proposals. Under two 2014 SEC staff “no-action” letters, investors were exempt from certain disclosure requirements if they relied on proxy advisory firms’ advice. Also, SEC permitted such firms to advise both public companies and institutional shareholders. In September 2018, SEC withdrew the no-action letters, a move advocated in a 2014 WLF Working Paper authored by then-Commissioner Daniel Gallagher. WLF’s comment applauded SEC for withdrawing the letters, while also urging the Commission to take further action to address conflicts of interest and the advisory firms’ refusal to allow access to the  models and methods they use to reach their recommendations.  Because the background information Commissioner Gallagher provided and the further steps he advocated remain timely and relevant to SEC’s ongoing discussion, WLF attached a copy of Gallagher’s Working Paper to its brief comment.


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WLF Working Paper attachment to comment