Bill would require proxy advisors to disclose financial analysis

Proxy advisors must disclose whether certain recommendations against company management rely on a written financial analysis. The rules cover services connected to a company headquartered or incorporated in North Carolina, or provided to someone in the state. The definition excludes specified financial institutions, in-house services, and qualifying charities under the stated revenue limits. This applies to recommendations against company management, or default policies involving such votes, on company or shareholder proposals. If the advice is not based on a written financial analysis, the advisor must say so to clients, notify the company board for advice or research services, and post a notice on its website while providing the service. If the advice is based on a written financial analysis, the advisor must say so, make the analysis available to clients on request, and provide it to the company board for advice or research services. The rules apply to proxy advisory services provided on or after October 1, 2026.

Proxy advisors providing covered services must register each year with the Secretary of State and pay a $100 fee. Covered services relate to a company headquartered or incorporated in North Carolina, or are provided to someone in the state; the bill excludes specified financial institutions, in-house services, and qualifying charities under the stated revenue limits. The act takes effect October 1, 2026.

The Attorney General may investigate violations, and people affected by a violation may ask a court for a declaration or an order stopping it. Eligible plaintiffs include service recipients, companies that are the subject of advice or research services, and shareholders of those companies. A violation is treated as an unfair and deceptive trade practice. A person bringing a court action must notify the Attorney General within seven days after filing; the Attorney General may intervene. The act takes effect October 1, 2026.