Paul Atkins Says SEC Will Review Proxy Advisory Firms, Shareholder Guidance: Report

• Atkins criticized both proxy firms and passive asset managers for influencing corporate decisions.
• His comments come after FTC has reportedly opened an early-stage antitrust investigation into ISS and Glass Lewis.
• The White House is also reportedly exploring options including an executive order to limit or ban certain proxy recommendations.

Paul Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), said on Friday that the agency is considering reforms for proxy advisory firms, which guide shareholders on corporate votes. 

“We’ll be looking at this entire area and come out with proposals and clarifications,” Atkins told Fox Business. He said the changes will likely come next year but declined to give a firm timeline, noting that the longest government shutdown in U.S. history had set back the agency’s work.

U.S. equities were mixed in midday trade on Friday. The SPDR S&P 500 ETF (SPY) was up 0.40%, the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 0.64% higher, but the SPDR Dow Jones Industrial Average ETF (DIA) was down 0.28%. Retail sentiment around DIA on Stocktwits continued to trend in ‘bullish’ territory over the past day, as chatter rose to ‘high’ from ‘normal’ levels.

Rising Concern Over Influence

Atkins' remarks come amid rising scrutiny of the industry, which includes major firms like Institutional Shareholder Services Inc. (ISS) and Glass Lewis & Co.

He said the SEC is examining how shareholder proposals and governance rules have been “weaponized” by political activists, pointing to recurring conflict-of-interest allegations involving proxy advisory firms. Atkins argued that the agencies need to address the issue “overall,” especially where recommendations may influence corporate outcomes.

He also criticized institutional investors that characterize themselves as passive but take steps to influence management. 

“They are passive holders. So where they get out of line is where they act to try to influence management, and that’s just not their role.” 

– Paul Atkins, Chair, U.S. Securities and Exchange Commission

Federal Trade Commission Probes Antitrust Concerns

Earlier this week, the Federal Trade Commission reportedly opened an investigation into ISS and Glass Lewis to determine whether their guidance on politically sensitive shareholder votes violated U.S. antitrust laws. The probe is in its early stages, according to Bloomberg.

The Wall Street Journal has also reported that the White House is exploring new measures to limit the influence of proxy advisers and index-fund managers. These potential steps address concerns raised by high-profile executives, including Elon Musk and Jamie Dimon, about conflicts of interest and market power in shareholder voting.

Officials are reportedly considering an executive order that could limit or ban shareholder recommendations from proxy-advisory firms, particularly where those firms have provided consulting services to the companies involved.

Second Attempt

During the first Trump administration, the SEC had adopted rules tightening oversight of proxy advisory firms. Those regulations were challenged in court, and the U.S. Court of Appeals for the District of Columbia put them on hold, preventing them from taking effect. The renewed attention from the SEC, FTC, and White House revives a policy debate that had stalled in recent years.

Read also: Bitcoin Dips To $95,000 – Michael Saylor Reportedly Says MSTR Is ‘Buying A Lot’

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on