SEC Comment on Proxy Advisors and Proposals from Minerva Analytics

Minerva Analytics has submitted a comment on the SEC’s proposed rules on proxy advisors and shareholder proposals. An except (footnotes omitted):

In respect of the SEC’s proposals, our reasons for opposing the proposed regulations that they will:
• Severely limit shareholders’ property rights;
• Interfere with investors’ commercial and contractual rights to receive research, which they have
paid for, and which is untampered by third party interference;
• Put service providers in breach of fiduciary responsibilities to clients;
• Breach fundamental analyst objectivity principles supported by professional bodies such as CFA6 and contradict the SEC’s previous commitment to analyst objectivity as exemplified by the Spitzer Settlement;
• Breach proxy research service providers’ fundamental rights to free commercial speech which are not only enshrined in the US constitution but numerous examples of case law;
• Damage much-needed competition and unfairly prejudice the business chances of challenger service providers like Minerva and present impossible competition hurdles;
• Risk breaching other global market regulations such as MIFID, MIFIR and various insider trading
laws; and
• Have a profoundly chilling effect on asset owner/manager and issuer engagement.

Furthermore, we believe that the highly-charged and well-funded political campaign that has been waged against proxy advisors (and by extension, their clients) is based not just on low-quality “academic research” but on a deliberately ill-conceived understanding of the role of service providers in the stewardship process. Most egregiously, it appears that the emails and letters sent to the SEC allegedly supporting the proposed regulations are works of fiction. The irony of this falsification is not lost on those of us who stand accused of providing research that is, allegedly “full of errors”.

200106Minerva comment-SEC

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