The Basis for ISS’ Lawsuit Against the SEC

If allowed to stand, the August interpretation and guidance would effectively treat the advice proxy advisers provide to their clients in the same way that the SEC regulates proxy solicitations (meaning the communications, most typically made by the boards and management of public companies, advocating that shareholders vote to support the position favored by the person doing the solicitation).  In contrast, proxy advice is a specialized form of investment advice rendered at the direction, and in the best interest, of our institutional investor clients. As such, proxy advice is the antithesis of a “solicitation” under the securities laws.

Unlike a person or firm engaged in a proxy solicitation, ISS is indifferent to the ultimate outcome of a shareholder vote and does not seek to achieve a certain result in the shareholder action.  Our sole objective in providing analyses and recommendations is to inform and empower our clients, sophisticated institutional investors, who vote their shares in the way that they see fit.

via The Basis for ISS’ Lawsuit Against the SEC.