Compliance Newsflash –August 28, 2019

August 28, 2019

SEC Clarifies Investment Advisers’ Proxy Voting Responsibilities and Application of Proxy Rules to Voting Advice

On August 21, 2019, The Securities and Exchange Commission provided guidance to assist investment advisers in fulfilling their proxy voting responsibilities. The guidance discusses, among other matters, the ability of investment advisers to establish a variety of different voting arrangements with their clients and matters they should consider when they use the services of a proxy advisory firm.  In addition, the Commission issued an interpretation that proxy voting advice provided by proxy advisory firms generally constitutes a “solicitation” under the federal proxy rules and provided related guidance about the application of the proxy antifraud rule to proxy voting advice.  

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FINRA Advises Member Firms to Submit Questions to the SEC on Regulation Best Interest – FINRA advises broker-dealers about the SEC’s recently adopted Regulation Best Interest and solicits implementation questions.

On August 21, 2019, JDSupra reported on August 7, 2019 the Financial Industry Regulatory Authority (“FINRA”) issued a Regulatory Notice (the “Notice”) intended to advise broker-dealers about the Securities and Exchange Commission’s (“SEC”) recently adopted Regulation Best Interest (“Reg BI”) and to encourage firms to submit any implementation questions to the SEC in preparation for Reg BI’s upcoming June 30, 2020, compliance date. Reg BI requires, among other things, that broker-dealers providing recommendations to retail customers act in their customers’ best interest. 

For more information, click here.