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for so finding, or for such longer period as 
to which the applicant consents. 
‘‘(C) GROUNDS FOR DECISION.—The Com-
mission shall grant registration under this sub-
section— 
‘‘(i) if the Commission finds that the 
requirements of this section are satisfied; 
and 
‘‘(ii) unless the Commission finds (in 
which case the Commission shall deny such 
registration) that— 
‘‘(I) the applicant has failed to 
certify to the Commission’s satisfac-
tion that it is able to consistently pro-
vide proxy advice based on accurate 
information and to materially comply 
with the procedures and methodolo-
gies disclosed under paragraph (1)(B) 
and with subsections (f) and (g); or 
‘‘(II) if the applicant were so reg-
istered, its registration would be sub-
ject to suspension or revocation under 
subsection (e). 
‘‘(3) PUBLIC AVAILABILITY OF INFORMATION.— 
Subject to section 24, the Commission shall make 
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the information and documents submitted to the 
Commission by a proxy advisory firm in its com-
pleted application for registration, or in any amend-
ment submitted under paragraph (1) or (2) of sub-
section (c), publicly available on the Commission’s 
website, or through another comparable, readily ac-
cessible means. 
‘‘(c) UPDATE OF REGISTRATION.— 
‘‘(1) UPDATE.—Each registered proxy advisory 
firm shall promptly amend and update its applica-
tion for registration under this section if any infor-
mation or document provided therein becomes mate-
rially inaccurate, except that a registered proxy advi-
sory firm is not required to amend the information 
required to be filed under subsection (b)(1)(B)(i) by 
filing information under this paragraph, but shall 
amend such information in the annual submission of 
the organization under paragraph (2) of this sub-
section. 
‘‘(2) CERTIFICATION.—Not later than 90 cal-
endar days after the end of each calendar year, each 
registered proxy advisory firm shall file with the 
Commission an amendment to its registration, in 
such form as the Commission, by rule, may prescribe 
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as necessary or appropriate in the public interest or 
for the protection of investors— 
‘‘(A) certifying that the information and 
documents in the application for registration of 
such registered proxy advisory firm continue to 
be accurate in all material respects; and 
‘‘(B) listing any material change that oc-
curred to such information or documents during 
the previous calendar year. 
‘‘(d) CENSURE, DENIAL, OR SUSPENSION OF REG-
ISTRATION; NOTICE AND HEARING.—The Commission, by 
order, shall censure, place limitations on the activities, 
functions, or operations of, suspend for a period not ex-
ceeding 12 months, or revoke the registration of any reg-
istered proxy advisory firm if the Commission finds, on 
the record after notice and opportunity for hearing, that 
such censure, placing of limitations, suspension, or revoca-
tion is necessary for the protection of investors and in the 
public interest and that such registered proxy advisory 
firm, or any person associated with such an organization, 
whether prior to or subsequent to becoming so associ-
ated— 
‘‘(1) has committed or omitted any act, or is 
subject to an order or finding, enumerated in sub-
paragraph (A), (D), (E), (H), or (G) of section 
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15(b)(4), has been convicted of any offense specified 
in section 15(b)(4)(B), or is enjoined from any ac-
tion, conduct, or practice specified in subparagraph 
(C) of section 15(b)(4), during the 10-year period 
preceding the date of commencement of the pro-
ceedings under this subsection, or at any time there-
after; 
‘‘(2) has been convicted during the 10-year pe-
riod preceding the date on which an application for 
registration is filed with the Commission under this 
section, or at any time thereafter, of— 
‘‘(A) any crime that is punishable by im-
prisonment for 1 or more years, and that is not 
described in section 15(b)(4)(B); or 
‘‘(B) a substantially equivalent crime by a 
foreign court of competent jurisdiction; 
‘‘(3) is subject to any order of the Commission 
barring or suspending the right of the person to be 
associated with a registered proxy advisory firm; 
‘‘(4) fails to furnish the certifications required 
under subsections (b)(2)(C)(ii)(I) and (c)(2); 
‘‘(5) has engaged in one or more prohibited acts 
enumerated in paragraph (1); or 
‘‘(6) fails to maintain adequate financial and 
managerial resources to consistently offer advisory 
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services with integrity, including by failing to comply 
with subsections (f) or (g). 
‘‘(e) TERMINATION OF REGISTRATION.— 
‘‘(1) VOLUNTARY WITHDRAWAL.—A registered 
proxy advisory firm may, upon such terms and con-
ditions as the Commission may establish as nec-
essary in the public interest or for the protection of 
investors, which terms and conditions shall include 
at a minimum that the registered proxy advisory 
firm will no longer conduct such activities as to 
bring it within the definition of proxy advisory firm 
in section 3(a)(81) of the Securities Exchange Act 
of 1934, withdraw from registration by filing a writ-
ten notice of withdrawal to the Commission. 
‘‘(2) COMMISSION AUTHORITY.—In addition to 
any other authority of the Commission under this 
title, if the Commission finds that a registered proxy 
advisory firm is no longer in existence or has ceased 
to do business as a proxy advisory firm, the Com-
mission, by order, shall cancel the registration under 
this section of such registered proxy advisory firm. 
‘‘(f) MANAGEMENT OF CONFLICTS OF INTEREST.— 
‘‘(1) ORGANIZATION
POLICIES
AND
PROCE-
DURES.—Each registered proxy advisory firm shall 
establish, maintain, and enforce written policies and 
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procedures reasonably designed, taking into consid-
eration the nature of the business of such registered 
proxy advisory firm and associated persons, to ad-
dress and manage any conflicts of interest that can 
arise from such business. 
‘‘(2) COMMISSION AUTHORITY.—The Commis-
sion shall issue final rules to prohibit, or require the 
management and disclosure of, any conflicts of inter-
est relating to the offering of proxy advisory services 
by a registered proxy advisory firm, including, with-
out limitation, conflicts of interest relating to— 
‘‘(A) the manner in which a registered 
proxy advisory firm is compensated by the cli-
ent, or any affiliate of the client, for providing 
proxy advisory services; 
‘‘(B) the provision of consulting, advisory, 
or other services by a registered proxy advisory 
firm, or any person associated with such reg-
istered proxy advisory firm, to the client; 
‘‘(C) business relationships, ownership in-
terests, or any other financial or personal inter-
ests between a registered proxy advisory firm, 
or any person associated with such registered 
proxy advisory firm, and any client, or any af-
filiate of such client; 
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‘‘(D) transparency around the formulation 
of proxy voting policies; 
‘‘(E) the execution of proxy votes if such 
votes are based upon recommendations made by 
the proxy advisory firm in which someone other 
than the issuer is a proponent; 
‘‘(F) issuing recommendations where proxy 
advisory firms provide advisory services to a 
company; and 
‘‘(G) any other potential conflict of inter-
est, as the Commission deems necessary or ap-
propriate in the public interest or for the pro-
tection of investors. 
‘‘(g) RELIABILITY OF PROXY ADVISORY FIRM SERV-
ICES.— 
‘‘(1) IN GENERAL.—Each registered proxy advi-
sory firm shall have staff sufficient to produce proxy 
voting recommendations that are based on accurate 
and current information. Each registered proxy advi-
sory firm shall detail procedures sufficient to permit 
companies receiving proxy advisory firm rec-
ommendations access in a reasonable time to the 
draft recommendations, with an opportunity to pro-
vide meaningful comment thereon, including the op-
portunity to present details to the person responsible 
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for developing the recommendation in person or tele-
phonically. Each registered proxy advisory firm shall 
employ an ombudsman to receive complaints about 
the accuracy of voting information used in making 
recommendations from the subjects of the proxy ad-
visory firm’s voting recommendations, and shall seek 
to resolve those complaints in a timely fashion and 
in any event prior to voting on the matter to which 
the recommendation relates. If the ombudsman is 
unable to resolve such complaints prior to voting on 
the matter, the proxy advisory firm shall include in 
its final report to its clients a statement from the 
company detailing its complaints, if requested in 
writing by the company. 
‘‘(2) REASONABLE TIME DEFINED.—For pur-
poses of this subsection, the term ‘reasonable 
time’— 
‘‘(A) means not less than 3 business days 
unless otherwise defined through a final rule 
issued by the Commission; and 
‘‘(B) shall not otherwise interfere with a 
proxy advisory firm’s ability to provide its cli-
ents with timely access to accurate proxy voting 
research, analysis, or recommendations. 
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‘‘(3) DRAFT
RECOMMENDATIONS
DEFINED.— 
For purposes of this subsection, the term ‘draft rec-
ommendations’— 
‘‘(A) means the overall conclusions of 
proxy voting recommendations prepared for the 
clients of a proxy advisory firm, including any 
public data cited therein, any company informa-
tion or substantive analysis impacting the rec-
ommendation, and the specific voting rec-
ommendations on individual proxy ballot issues; 
and 
‘‘(B) does not include the entirety of the 
proxy advisory firm’s final report to its clients. 
‘‘(h) DESIGNATION
OF COMPLIANCE OFFICER.— 
Each registered proxy advisory firm shall designate an in-
dividual responsible for administering the policies and pro-
cedures that are required to be established pursuant to 
subsections (f) and (g), and for ensuring compliance with 
the securities laws and the rules and regulations there-
under, including those promulgated by the Commission 
pursuant to this section. 
‘‘(i) PROHIBITED CONDUCT.— 
‘‘(1) PROHIBITED ACTS AND PRACTICES.—The 
Commission shall issue final rules to prohibit any 
act or practice relating to the offering of proxy advi-
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sory services by a registered proxy advisory firm 
that the Commission determines to be unfair, coer-
cive, or abusive, including any act or practice relat-
ing to— 
‘‘(A) conditioning a voting recommendation 
or other proxy advisory firm recommendation 
on the purchase by an issuer or an affiliate 
thereof of other services or products, of the reg-
istered proxy advisory firm or any person asso-
ciated with such registered proxy advisory firm; 
and 
‘‘(B) modifying a voting recommendation 
or otherwise departing from its adopted system-
atic procedures and methodologies in the provi-
sion of proxy advisory services, based on wheth-
er an issuer, or affiliate thereof, subscribes or 
will subscribe to other services or product of the 
registered proxy advisory firm or any person as-
sociated with such organization. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (1), or in any rules or regulations adopt-
ed thereunder, may be construed to modify, impair, 
or supersede the operation of any of the antitrust 
laws (as defined in the first section of the Clayton 
Act, except that such term includes section 5 of the 
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Federal Trade Commission Act, to the extent that 
such section 5 applies to unfair methods of competi-
tion). 
‘‘(j) STATEMENTS OF FINANCIAL CONDITION.—Each 
registered proxy advisory firm shall, on a confidential 
basis, file with the Commission, at intervals determined 
by the Commission, such financial statements, certified (if 
required by the rules or regulations of the Commission) 
by an independent public auditor, and information con-
cerning its financial condition, as the Commission, by rule, 
may prescribe as necessary or appropriate in the public 
interest or for the protection of investors. 
‘‘(k) ANNUAL REPORT.—Each registered proxy advi-
sory firm shall, at the beginning of each fiscal year of such 
firm, report to the Commission on the number of share-
holder proposals its staff reviewed in the prior fiscal year, 
the number of recommendations made in the prior fiscal 
year, the number of staff who reviewed and made rec-
ommendations on such proposals in the prior fiscal year, 
and the number of recommendations made in the prior 
fiscal year where the proponent of such recommendation 
was a client of or received services from the proxy advisory 
firm. 
‘‘(l) TRANSPARENT
POLICIES.—Each registered 
proxy advisory firm shall file with the Commission and 
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