ASA: Proxy Advisors Have Politicized U.S. Capital Markets, Harmed Investors and Small Businesses

WASHINGTON – The American Securities Association (ASA) today sent a letter to the Financial Services Committee ahead of a hearing examining the influence of proxy advisory firms on capital markets and corporate governance.

"The foreign-owned proxy advisors have used the SEC’s shareholder proposal rules to politicize America's capital markets and impose enormous costs on ordinary investors saving for retirement or their child’s education," said ASA President and CEO Chris Iacovella. "ASA looks forward to working with Chairman Hill and the Committee to reform the proxy process in a way that protects investors, does not politicize the capital markets, and reduces costs for small businesses who want to enter the public markets."

"ASA supports several bills that the Committee will consider as part of the hearing, including legislation to prohibit the practice of 'robovoting' where institutional investors blindly rely on proxy firm recommendations, and a bill that would directly address proxy advisor conflicts of interest by prohibiting these firms from operating affiliated corporate consulting business alongside a proxy voting business," Iacovella wrote in the letter.

Read ASA's full letter here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.