Sponsors (2)
The bill aims to reduce conflicts and increase enforcement around proxy advice—boosting trust for investors and issuers—but at the cost of higher compliance burdens and potential reduced access or increased prices for proxy voting advice, especially for smaller firms and their clients.
Investors and issuers will face fewer conflicted recommendations because proxy advisory firms must avoid conflicts of interest when advising on shareholder votes, increasing trust in proxy recommendations.
The SEC can impose civil penalties for violations, strengthening enforcement and creating a stronger deterrent against conflicted advice by proxy advisory firms.
Investors and users of proxy advice could face reduced access to or higher costs for proxy voting recommendations if firms must cease services when conflicts exist.
Smaller proxy advisory firms will likely incur new compliance costs and increased legal exposure from the bill’s definitions and enforcement, raising operating costs and risking reduced competition in the market.
Based on analysis of 2 sections of legislative text.
Prohibits proxy advisory firms from providing proxy voting advice when specified conflicts of interest exist and allows the SEC to seek civil penalties for violations.
Introduced June 24, 2025 by Scott Fitzgerald · Last progress June 24, 2025
Prohibits proxy advisory firms from issuing proxy voting advice when specified conflicts of interest exist and gives the SEC authority to bring civil penalty actions for violations. It defines key terms and lists several categories of conflicted conduct—such as providing consulting services to issuers, changing recommendations based on whether an issuer is a client, providing stewardship services to proponents, or belonging to groups that back related shareholder proposals.