How Companies Can Prepare for SEC Proxy Advisor Reform Tuesday, January 12, 2021 The SEC’s long-awaited final rules governing voting advice provided by proxy advisory firms such as Institutional Shareholders Service (ISS) and Glass Lewis (the “final rules”) became effective on November 2, 2020. The final rules confirm that proxy advice constitutes a solicitation under the federal proxy rules, and provide proxy advisory firms with a conditioned exemption from the filing and information requirements that would normally apply to such solicitations. To secure the exemption, proxy advisory firms must (i) provide disclosure of conflicts of interest and (ii) adopt policies and procedures to inform public companies of the firm’s proxy voting advice and notify the firm’s clients of public company responses to this advice. The final rules provide two safe harbors to satisfy these conditions as well as additional guidance on the applicability of the proxy rules’ anti-fraud provisions to proxy voting advice. The final rules fall short of the changes outlined in the related proposed rules issued in November 2019 (which we discussed here) principally by (i) failing to mandate an opportunity for companies that are the subject of this advice to review and provide direct feedback on voting advice before its delivery to an advisor’s clients and (ii) adopting a principles-based rather than a prescriptive approach.