EO 14366
Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors
Economy & TradeGovernment ReformLaw Enforcement
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Summary
This executive order directs federal agencies to increase oversight of proxy advisory firms, particularly Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, which advise investors on shareholder voting. The order instructs the SEC, FTC, and Department of Labor to review and potentially revise regulations and investigate whether these firms' practices related to environmental, social, governance, and diversity considerations constitute violations of securities law, antitrust law, or fiduciary duties.
Key Points
- 1Directs the SEC to review proxy advisor regulations and consider enforcement actions against proxy advisors for material misstatements, potential registration requirements under the Investment Advisers Act, and examination of whether investment advisers' use of proxy advisors violates fiduciary duties
- 2Instructs the FTC to investigate proxy advisors for potential antitrust violations, unfair competition, inadequate conflict-of-interest disclosure, and misleading information that may harm consumer investments
- 3Requires the Department of Labor to revise regulations and guidance regarding fiduciary duties of those managing pensions and retirement plans in relation to proxy advisory practices
- 4Identifies Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC as controlling over 90 percent of the proxy advisor market and states these firms have promoted diversity, equity, inclusion, and environmental/social/governance policies
This summary is for informational purposes only. It may not capture all nuances of the executive order. Always refer to the official text for authoritative information.
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