Shortly following the SEC's proxy roundtable, Senators Reed, Perdue, Heitkamp, Gillis, Jones and Kennedy introduced a new bill, S. 3614, which would amend the Investment Advisers Act in order to require proxy advisory firms to register as advisers. The bill is referred to as the Corporate Governance Fairness Act. In addition to requiring registration under the Advisers Act, the bill would require periodic inspections by the Commission of the activities of proxy advisory firms to examine compliance with policies and procedures designed to address conflicts of interest as well as other matters such as knowingly making false statements or omitting to state a material fact that would be necessary not to render a proxy advisory firm's statements not misleading. Finally, the bill would require the Commission to deliver a report to Congress every five years assessing the effectiveness of the regulation of proxy advisory firms.
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