April 15, 2019
SEC Officials Comment on Evolving Proxy Voting Process
WHAT HAPPENED?
In remarks during the ICI Mutual Funds and Investment Management Conference, SEC Commissioner Elad Roisman and Director of the Division of Investment Management, Dalia Blass, spoke on the future of the proxy voting process. Blass announced that, in 2019, the Commission “will be exploring ways to update current guidance to clarify how investment advisers should fulfill their fiduciary duties in this area.” Roisman echoed the statement, saying, “I believe it is a good time for the Commission to consider whether guidance would be helpful to asset managers as they consider how to utilize the services of proxy advisory firms.”
The use of third-party proxy voting has become a source of controversy due to questions about voting accuracy, possible conflicts of interest, and the fiduciary duties of asset managers. Blass and Roisman’s comments indicate the continuing evaluation of proxy voting following the 2018 staff roundtable on the subject.
WHAT DOES THIS MEAN FOR ME?
As with any other key vendor, advisers should conduct an annual due diligence review to evaluate the effectiveness of services and conflicts of interest for any third-party service providers used to assist the firm in voting proxies. Fairview is available to assist clients in documenting this review as part of the firm’s annual proxy review meeting.
Fairview will alert our Adviser clients who utilize third-party proxy voting service providers of any changes to guidelines made by the commission. We will assist with assessing potential updates to the Adviser’s policies, procedures, and disclosures. In the meantime, the Commission can be reached for comments and feedback on proxy voting policies by contacting staff.
Sources: https://www.sec.gov/contact-information/sec-directory
https://www.sec.gov/news/speech/speech-roisman-031819
https://www.sec.gov/news/speech/speech-blass-031819
https://www.sec.gov/proxy-roundtable-2018
