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Congress could impose new rules for proxy advisory firms

Joe Mont | January 3, 2018

The House of Representatives has passed a bill that, if approved in the Senate, could mean big changes for proxy advisory firms, notably industry leaders like ISS and Glass Lewis.

The Corporate Governance Reform and Transparency Act of 2017, reintroduced by Rep. Sean Duffy (R-WI) passed the House on Dec. 20, 2017, by a 238-182 vote.

“Proxy advisory firms play an important role in advising their clients but they are susceptible to conflicts of interest,” Duffy said. “Investors… across America expect and deserve certainty that their rights as shareholders won’t be compromised by advisors issuing conflicting recommendations and executing votes. “ He said the bill “will foster greater accountability, transparency, responsiveness, and competition in the proxy advisory firm industry.”

Financial Services Committee Chairman Jeb Hensarling (R-Texas) was a champion of the bill. “The Committee...

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