We are disappointed that the SEC did not ask for public comment on its new Proxy Advisor Interpretation and Guidance before issuance. We would ask that the SEC re-consider that interpretation and guidance, with appropriate opportunity for public comment. Should the SEC move ahead with the “Proxy Advisor Rulemaking,” we ask that you not place requirements on proxy advisors that would reduce their independence and effectiveness or reduce competition.
It is commonplace throughout our economy that firms can freely pool their resources, including through third parties, where they consider it feasible to deliver what clients routinely expect from them. Funds’ retention of advisors to help ensure that proxies are voted in a cost-effective, timely and informed manner is no exception. Proxy advisory firms provide market-based solutions, and the SEC policy initiatives have the potential to adversely affect the voluntary, uncoerced, private contracts between investors and their proxy advisors. We are concerned that the SEC approach risks replacing the current, effective free-
enterprise approach with a system that defers too much to incumbent management teams and boards of directors by diminishing investor oversight and accountability mechanisms.