FACT SHEET

Proxy Voting 

Advice

U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 1 OF 2

Background

Proxy advisory firms, or “proxy voting advice businesses” (PVABs), help shareholders 

exercise their right to vote on matters at issue in the public companies they own by 

providing advice according to predetermined policies and facilitating the vote execution 

process. Investors rely on proxy advisory firms to stay informed about company and 

shareholder proposals. 

In July 2020, the Commission adopted final rules establishing new requirements for proxy 

advisory firms. Since their adoption, institutional investors and other PVAB clients have 

continued to express strong concerns about the 2020 rules’ impact on their ability to 

receive independent proxy voting advice in a timely manner. In November 2021, the 

Commission proposed amendments that would rescind two portions of the 2020 rules. 

Under the proposed amendments, proxy voting advice generally would remain a 

“solicitation” subject to the proxy rules, and proxy advisory firms generally would still be 

subject to the conflicts of interest disclosure requirements adopted in 2020.

Proxy Rule Exemptions for Proxy Voting Advice

The 2020 rules added conditions in Rule 14a-2(b)(9)(ii) to exemptions from the proxy rules’ 

information and filing requirements upon which proxy advisory firms often rely. First, those 

conditions required proxy advisory firms to make their advice available to the companies 

that are the subject of their advice at or before the time that they make the advice available 

to their clients. Second, the conditions required proxy advisory firms to provide their clients 

with a mechanism by which they could reasonably be expected to become aware of any 

written statements by registrants who are the subject of the advice regarding the proxy 

advisory firms’ proxy voting advice.

The Securities and Exchange Commission adopted amendments to the proxy rules governing 

proxy voting advice as proposed in 2021. The rules enhance proxy advisory firms’ ability to 

deliver independent proxy voting advice to their clients in a timely manner. 

The final amendments rescind certain conditions from the proxy rule exemptions for proxy 

voting advice and related guidance to investment advisers. They also remove a note that 

provided examples of situations in which the failure to disclose certain information in proxy 

voting advice may be considered misleading within the meaning of the proxy rules’ prohibition 

on material misstatements or omissions.
FACT SHEET | Proxy Voting Advice

U.S. SECURITIES AND EXCHANGE COMMISSION Page 2 of 2

Upon further analysis in light of continued concerns expressed by investors and others, the 

Commission concluded that the potential informational benefits to investors of these 

conditions do not sufficiently justify the risks they pose to the cost, timeliness, and 

independence of proxy voting advice. The Commission is rescinding Rule 14a-2(b)(9)(ii)

and the related safe harbors and exclusions from those conditions.

2020 Supplemental Proxy Voting Guidance

In connection with the 2020 rules, the Commission issued supplemental guidance to 

investment advisers about their proxy voting obligations. The supplemental guidance was 

prompted, in part, by the Commission’s adoption of the conditions set forth in Rule 14a2(b)(9)(ii). The adopting release rescinds the supplemental guidance, noting consideration 

of comment letters on the November 2021 proposing release and existing obligations and 

considerations regarding proxy voting under the Investment Advisers Act of 1940.

Liability Rule for Proxy Voting Advice

The 2020 rules also amended Rule 14a-9, which prohibits false or misleading statements, 

to add Note (e), which set forth examples of material misstatements or omissions related to 

proxy voting advice. Specifically, Note (e) provided that the failure to disclose material 

information regarding proxy voting advice could be misleading. 

The final amendments delete Note (e) to Rule 14a-9, as the Commission concluded that 

Note (e) created a risk of confusion regarding the application of Rule 14a-9 to proxy voting 

advice. The adopting release also discusses the Commission’s views regarding the 

application of Rule 14a-9 to proxy voting advice, in particular with respect to statements of 

opinion.

Additional Information:

The final amendments and the rescission of the guidance will be effective 60 days after the date of publication 

of the adopting release in the Federal Register.