Proxy advisers would disclose the basis for certain voting advice

A proxy adviser would have to disclose whether certain advice against company management relies on a written financial analysis. The rule covers recommendations and default voting policies against company management on proposals by a company or its shareholders. The disclosure goes to service recipients and, for advice or research about a vote, the affected company's board. The analysis must weigh expected short-term and long-term costs and benefits to the company, say which vote or action is most likely to help shareholder value, and explain how it was prepared, including staff experience and location. If the adviser used such an analysis, the disclosure must say it is available on request, and the adviser must provide it electronically within a reasonable time when requested. The rule would apply to proxy advisory services provided to shareholders on or after July 1, 2026.

A proxy adviser would have to post a notice on its website about certain advice against company management that lacks a written financial analysis. This applies when the adviser's services include recommendations or default voting policies against company management that lack the described analysis. The notice must be clear and prominent on the website's home or front page. It must explain that some advice against management is not based on an analysis of costs and benefits, likely effects on shareholder value, and how the analysis was prepared. The rule would apply to proxy advisory services provided to shareholders on or after July 1, 2026.

Violations could lead to state discipline for registered investment advisers, and certain affected people or companies could ask a court for relief. The discipline rule applies to registered investment advisers. The court action is available to the specified shareholders and companies aggrieved by a violation. A shareholder who received the service, someone acting for that shareholder, or the company at issue may ask a court for a declaration or an order to stop the violation. The person bringing the case must notify the attorney general by regular mail within seven days; the attorney general may join the case. These provisions would apply to proxy advisory services provided to shareholders on or after July 1, 2026.