The NAM notched a significant legal victory yesterday when a federal judge vacated the Securities and Exchange Commission’s suspension of a 2020 rule regulating “proxy advisory firms.”
The background: Proxy firms advise institutional investors on how to vote their shares in publicly traded companies, but those firms have long been unregulated and unaccountable.
- In 2020, in large part through the advocacy of the NAM, the SEC finalized a rule increasing oversight of these firms—but in 2021, the SEC’s new leadership announced that the agency would not enforce the rule.
- Suspending the rule without public notice and comment was a violation of administrative law—and the NAM stepped up to challenge this circumvention of the Administrative Procedure Act in court.
The win: Yesterday, the NAM won its case against the SEC in the U.S. District Court for the Western District of Texas. The decision makes clear that the SEC acted unlawfully by suspending the compliance date for the proxy firm rule without following the notice-and-comment procedures required under the APA.
- As the court said in its opinion, “[agencies] do not have the inherent power to stay or delay a final rule absent notice-and-comment rulemaking.”
What’s next: The NAM has also filed suit against the SEC’s 2022 rescission of critical components of the 2020 rule. That case is still ongoing, with oral arguments scheduled for December—but this week’s decision ensures that the SEC will not be able to re-suspend the 2020 rule if the NAM is successful in its challenge to the rescission.
Our take: “Today’s decision is a victory for the rule of law, and the NAM Legal Center was proud to lead this effort for the industry,” said NAM Chief Legal Officer Linda Kelly. “Federal agencies are bound by the Administrative Procedure Act—standards the SEC failed to meet by indefinitely delaying the compliance date for the 2020 proxy firm rule without notice-and-comment rulemaking. Manufacturers depend on regulators to promulgate and enforce reliable rules of the road, and the NAM looks forward to similarly holding the SEC to account in our ongoing case against the agency’s unlawful rescission of the 2020 rule.”
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org