Relating to proxy advisors and proxy advisory services, and including applicability provisions

This bill relates to proxy advisors and proxy advisory services. The bill sets forth the requirements for a proxy advisor (advisor) that provides a proxy advisory service (service) to a shareholder or other person with authority to vote on behalf of a shareholder, or that makes a default recommendation against company management on a company proposal or proxy proposal. “Company proposal”, “default recommendation”, “proxy advisor”, “proxy advisory service”, and “proxy proposal” are defined in the bill. If the service or default recommendation is not based on a financial analysis, the advisor shall, concurrently with providing the service or default recommendation: (1) provide a disclosure to each shareholder or person with authority to vote on behalf of a shareholder that meets the requirements of the bill; (2) provide the same disclosure to the board of directors of each company that is the subject of the service, except where the service provides voting recommendations, policies, or default recommendations; and (3) post on the advisor’s internet site a statement that the advisor’s services include one or more services that involve recommendations or policies against company management on company proposals or proxy proposals that are not based on a financial analysis. If the service or default recommendation is based on a financial analysis, the advisor shall, concurrently with providing the service: (1) provide a disclosure to each shareholder or person with authority to vote on behalf of a shareholder that meets the requirements of the bill; (2) upon request, make the financial analysis available within a reasonable time to any client of the service; and (3) provide the financial analysis to the board of directors of each company that is the subject of the service, except for services that provide voting recommendations, policies, or default recommendations.16. An individual, a company, or a shareholder of a company that received a service provided by an advisor that violated the bill may bring an action in district court to enjoin the advisor’s violation. The party bringing such action shall provide written notice of the action to the attorney general no later than seven calendar days after the date the action is filed, and the attorney general may intervene in any such action for injunctive relief. The bill applies to a service or a default recommendation provided by an advisor on or after July 1, 2026.