Policy and Legal

Policy and Legal

SEC Finalizes Proxy Rule

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This significant victory on an NAM priority protects manufacturing employees and investors, the NAM’s experts say.

The backstory: Investment advisers and fund managers who oversee Americans’ retirement savings have a voice in the policies of the companies in which the fund invests. These fund managers often turn for assistance to proxy advisory firms to recommend votes on company policies—giving these firms enormous influence.

The problem: Proxy advisory firms have never been subjected to SEC oversight, leading to questionable methodologies, errors, conflicts of interest and a lack of transparency in how they make decisions.

The victory: After years of advocacy by the NAM, the SEC released landmark standards today that do two critical things:

  • Proxy advisory firms will be regulated by the SEC, subjecting these previously unregulated firms to critical oversight and bringing needed transparency to their conflicts and methodologies.
  • Asset managers will receive guidelines laying out how they can exercise due diligence appropriately if they use proxy advisory firms to ensure they are protecting the best interests of investors.

The bottom line: “This is a big win for manufacturers and for manufacturing workers who have money in pension plans, retirement plans and other investments,” said NAM Director of Tax and Domestic Economic Policy Charles Crain. “For years, the NAM has fought for accountability and transparency. This new regulatory framework will protect manufacturing workers and ensure that their investments receive the responsible care they deserve.”

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