Restoring Shareholder Transparency Act of 2022
This bill limits corporate shareholder proposals and revises proxy voting protocols for shareholders. Current shareholder proposal rules address who is eligible to submit shareholder proposals for a vote and the dissemination of information to voters through a proxy statement.
Under the bill, a company is not required to comply with these shareholder proposal rules. Instead, a company may opt-in to these rules.
The bill also revises these rules to require a shareholder hold at least 1% of the market value of the company's securities in order to submit a shareholder proposal. Under current rules, a shareholder's ability to submit a proposal depends upon the dollar amount of shares held and the length of time the shares have been held. It also revises these rules to provide that a company's allowed bases for exclusion of a proposal apply without regard to whether the proposal relates to a significant social policy issue. Under current guidance, a shareholder proposal may overcome a company's exclusion if the proposal is of social policy significance.
Finally, the bill generally prohibits proxy voting advice furnished by a person who provides such advice for a fee.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3945 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
2d Session
S. 3945
To amend the Securities Exchange Act of 1934 to address the
solicitation of proxy with respect to securities, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 29, 2022
Mr. Hagerty (for himself, Mr. Daines, Mr. Tillis, and Ms. Lummis)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to address the
solicitation of proxy with respect to securities, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Restoring Shareholder Transparency
Act of 2022''.
SEC. 2. PROXIES.
Section 14(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78n(a)) is amended by adding at the end the following:
``(3) For the purposes of this subsection, soliciting any proxy or
consent or authorization in respect of a security--
``(A) includes the furnishing of a form of proxy or other
communication to a holder of the security under circumstances
reasonably calculated to result in the procurement,
withholding, or revocation of a proxy, including any proxy
voting advice that--
``(i) makes a recommendation to the security holder
as to the vote, consent, or authorization of the
security holder on a specific matter for which the
approval of the security holder is solicited; and
``(ii) is furnished by a person that--
``(I) markets the expertise of the person
as a provider of such proxy voting advice,
separately from other forms of investment
advice; and
``(II) sells such proxy voting advice for a
fee; and
``(B) does not include the furnishing of any proxy voting
advice by a person that furnishes such advice only in response
to an unprompted request.''.
SEC. 3. SHAREHOLDER PROPOSALS.
(a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.) is amended--
(1) in section 6(b) (15 U.S.C. 78f(b)), by adding at the
end the following:
``(11) The rules of the exchange do not require an issuer
to be in compliance with section 240.14a-8 of title 17, Code of
Federal Regulations, or any successor regulation, as a
condition of having a security of the issuer listed on the
exchange.''; and
(2) in section 14 (15 U.S.C. 78n), by adding at the end the
following:
``(k) Shareholder Proposals.--Notwithstanding any other provision
of law or regulation, beginning on the date of enactment of this
subsection, no issuer shall be subject to the requirements of section
240.14a-8 of title 17, Code of Federal Regulations, or any successor
regulation, unless the issuer agrees to be subject to those
requirements.''.
(b) Bases for Exclusion.--Not later than 1 year after the date of
enactment of this Act, the Securities and Exchange Commission shall
amend section 240.14a-8(i) of title 17, Code of Federal Regulations, or
any successor regulation, to provide that all of the bases for
exclusion of a proposal under that provision shall apply without regard
to whether the proposal relates to a significant social policy issue.
(c) Market Value.--Not later than 30 days after the date of
enactment of this Act, the Securities and Exchange Commission shall
amend section 240.14a-8(b)(1) of title 17, Code of Federal Regulations,
or any successor regulation--
(1) by amending clause (i) to read as follows: ``(i) You
must hold at least 1 percent of the market value of the
company's securities.''; and
(2) by striking clause (vi).
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Committee on Banking, Housing, and Urban Affairs. Hearings held.
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