,i  #aah? ,,congress  #a/ ,session  ,h4 
,r4 #dehi  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,july #ab1 #bjbc,mr4  
,/eil introduc$ ! foll[+ bill2 :i* 0    
ref]r$ to ! ,committee on ,f9ancial     
,s]vices  ,a ,,bill  ,to am5d !         
,securities ,ex*ange ,act ( #aicd to    
provide = ! regi/ration ( proxy advisory
 firms1 & = o!r purposes4  #a4          
,regi/ration ( proxy advisory firms  7a7
 ,am5dm5t ,! ,securities ,ex*ange ,act (
 #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is 
am5d$ by ins]t+ aft] section #ae;,g !   
foll[+ new section3  #ae;,h4            
,regi/ration ( proxy advisory firms  7a7
 ,conduct prohibit$ ,x %all be unlawful 
= a proxy advisory firm to make use ( ! 
mails or any means or in/rum5tality (   
int]/ate comm]ce to provide proxy vot+  
advice1 rese>*1 analysis1 rat+s or      
recomm5dations to any cli5t1 unless su* 
proxy advisory firm is regi/]$ "u ?is   
section4  7b7 ,regi/ration proc$ures    
7#a7 ,application = regi/ration  7,a7 ,9
 g5]al ,a proxy advisory firm %all file 

) ! ,commission an application =        
regi/ration1 9 su* =m z ! ,commission   
%all require1 by rule1 & conta9+ !      
in=mation describ$ 9 subp>agraph 7,b74  
7,b7 ,requir$ in=mation ,an application 
= regi/ration "u ?is section %all       
conta9-- 7i7 a c]tification t !         
applicant is able to consi/5tly provide 
proxy advice bas$ on accurate in=mation2
  7ii7 ) respect to cli5ts ( ! applicant
 t vote %>es held on behalf ( %>ehold]s1
 a c]tification t ! applicant-- 7,i7 w  
provide proxy vot+ advice only 9 ! be/  
economic int]e/ ( ^? %>ehold]s2 &       
7,,ii7 has ! requisite exp]tise to      
ensure t vot+ recomm5dations are 9 ! be/
 economic int]e/ ( ^? %>ehold]s2  7iii7 
in=mation on ! proc$ures & me?odologies 
t ! applicant uses to ensure t proxy    
vot+ recomm5dations are 9 ! be/ economic
 int]e/ ( ! ultimate %>ehold]s2  7iv7   
in=mation on ! organizational /ructure (
 ! applicant2  7v7 an explanation ( :e!r
 or n ! applicant has 9 effect a code ( 
e?ics1 & if n1 ! reasons !re=2  7vi7 a  

description ( any pot5tial or actual    
conflict ( int]e/ relat+ to ! provision 
( proxy advisory s]vices1 includ+ ^?    
aris+ out ( or result+ f ! own]%ip      
/ructure ( ! applicant or ! provision ( 
o!r s]vices by ! applicant or any p]son 
associat$ ) ! applicant2  7vii7 !       
policies & proc$ures 9 place to publicly
 disclose & manage conflicts ( int]e/ "u
 subsection 7f72  7viii7 in=mation      
relat$ to ! pr(essional & academic      
qualifications ( /aff task$ ) provid+   
proxy advisory s]vices2 &  7ix7 any o!r 
in=mation & docum5ts conc]n+ ! applicant
 & any p]son associat$ ) su* applicant z
 ! ,commission1 by rule1 may prescribe z
 necess>y or appropriate 9 ! public     
int]e/ or = ! protection ( inve/ors4    
7#b7 ,review ( application  7,a7        
,initial det]m9ation ,n lat] ?an #ij    
days aft] ! date on :i* ! application = 
regi/ration is fil$ ) ! ,commission "u  
p>agraph 7#a7 7or )9 su* long] p]iod z  
to :i* ! applicant cons5ts7 !           
,commission %all-- 7i7 by ord]1 grant   

regi/ration2 or  7ii7 in/itute proce$+s 
to det]m9e :e!r regi/ration %\ld be     
d5i$4  7,b7 ,conduct ( proce$+s  7i7    
,cont5t ,proce$+s ref]r$ to 9           
subp>agraph 7,a77ii7 %all-- 7,i7 include
 notice ( ! gr\nds = d5ial "u           
consid]ation & an opportunity = he>+2 & 
7,,ii7 be conclud$ n lat] ?an #abj days 
aft] ! date on :i* ! application =      
regi/ration is fil$ ) ! ,commission "u  
p>agraph 7#a74  7ii7 ,det]m9ation ,at ! 
conclusion ( su* proce$+s1 !            
,commission1 by ord]1 %all grant or d5y 
su* application = regi/ration4  7iii7   
,ext5sion au?oriz$ ,! ,commission may   
ext5d ! "t = conclusion ( su* proce$+s =
 n long] ?an #ij days1 if ! ,commission 
f9ds good cause = su* ext5sion &        
publi%es its reasons = s f9d+1 or = su* 
long] p]iod z to :i* ! applicant        
cons5ts4  7,c7 ,gr\nds = decision ,!    
,commission %all grant regi/ration "u   
?is subsection-- 7i7 if ! ,commission   
f9ds t ! requirem5ts ( ?is section are  
satisfi$2 &  7ii7 unless ! ,commission  

f9ds 79 :i* case ! ,commission %all d5y 
su* regi/ration7 t-- 7,i7 ! applicant   
has fail$ to c]tify to ! ,commission's  
satisfaction t x is able to consi/5tly  
provide proxy advice bas$ on accurate   
in=mation & to mat]ially comply ) !     
proc$ures & me?odologies disclos$ "u    
p>agraph 7#a77;,b7 & ) subsections 7f7 &
 7g72 or  7,,ii7 if ! applicant 7 s     
regi/]$1 its regi/ration w\ld be subject
 to susp5sion or revocation "u          
subsection 7d74  7#c7 ,public           
availability ( in=mation ,subject to    
section #bd1 ! ,commission %all make !  
in=mation & docum5ts submitt$ to !      
,commission by a proxy advisory firm 9  
its complet$ application = regi/ration1 
or 9 any am5dm5t submitt$ "u p>agraph   
7#a7 or 7#b7 ( subsection 7c71 publicly 
available on ! ,commission's website1 or
 ?r\gh ano!r comp>able1 readily         
accessible means4  7c7 ,update (        
regi/ration  7#a7 ,update ,ea* regi/]$  
proxy advisory firm %all promptly am5d &
 update its application = regi/ration "u

 ?is section if any in=mation or docum5t
 provid$ !re9 becomes mat]ially         
inaccurate1 except t a regi/]$ proxy    
advisory firm is n requir$ to am5d !    
in=mation requir$ to be fil$ "u         
subsection 7b77#a77;,b77i7 by fil+      
in=mation "u ?is p>agraph1 b %all am5d  
su* in=mation 9 ! annual submission ( ! 
organization "u p>agraph 7#b7 ( ?is     
subsection4  7#b7 ,c]tification ,n lat] 
?an #ij cal5d> days aft] ! end ( ea*    
cal5d> ye>1 ea* regi/]$ proxy advisory  
firm %all file ) ! ,commission an       
am5dm5t to its regi/ration1 9 su* =m z !
 ,commission1 by rule1 may prescribe z  
necess>y or appropriate 9 ! public      
int]e/ or = ! protection ( inve/ors--   
7,a7 c]tify+ t ! in=mation & docum5ts 9 
! application = regi/ration ( su*       
regi/]$ proxy advisory firm cont9ue to  
be accurate 9 all mat]ial respects2 &   
7,b7 li/+ any mat]ial *ange t occurr$ to
 su* in=mation or docum5ts dur+ !       
previ\s cal5d> ye>4  7d7 ,c5sure1 d5ial1
 or susp5sion ( regi/ration2 notice &   

he>+ ,! ,commission1 by ord]1 %all      
c5sure1 place limitations on !          
activities1 functions1 or op]ations (1  
susp5d = a p]iod n exce$+ #ab mon?s1 or 
revoke ! regi/ration ( any regi/]$ proxy
 advisory firm if ! ,commission f9ds1 on
 ! record aft] notice & opportunity =   
he>+1 t su* c5sure1 plac+ ( limitations1
 susp5sion1 or revocation is necess>y = 
! protection ( inve/ors & 9 ! public    
int]e/ & t su* regi/]$ proxy advisory   
firm1 or any p]son associat$ ) su* an   
organization1 :e!r prior to or subsequ5t
 to becom+ s associat$-- 7#a7 has       
committ$ or omitt$ any act1 or is       
subject to an ord] or f9d+1 enum]at$ 9  
subp>agraph 7,a71 7,d71 7,e71 7,h71 or  
7,g7 ( section #ae7;b77#d71 has be5     
convict$ ( any (f5se specifi$ 9 section 
#ae7;b77#d77;,b71 or is enjo9$ f any    
action1 conduct1 or practice specifi$ 9 
subp>agraph 7,c7 ( section #ae7;b77#d71 
dur+ ! #aj-ye> p]iod prec$+ ! date (    
comm5cem5t ( ! proce$+s "u ?is          
subsection1 or at any "t !reaft]2  7#b7 

has be5 convict$ dur+ ! #aj-ye> p]iod   
prec$+ ! date on :i* an application =   
regi/ration is fil$ ) ! ,commission "u  
?is section1 or at any "t !reaft]1 (--  
7,a7 any crime t is puni%able by        
imprisonm5t = #a or m ye>s1 & t is n    
describ$ 9 section #ae7;b77#d77;,b72 or 
7,b7 a sub/antially equival5t crime by a
 =eign c\rt ( compet5t jurisdiction2    
7#c7 is subject to any ord] ( !         
,commission b>r+ or susp5d+ ! "r ( !    
p]son to be associat$ ) a regi/]$ proxy 
advisory firm2  7#d7 fails to furni% !  
c]tifications requir$ "u subsections    
7b77#b77;,c77ii77,i7 & 7c77#b72  7#e7   
has engag$ 9 "o or m prohibit$ acts     
enum]at$ 9 p>agraph 7#a72  7#f7 fails to
 ma9ta9 adequate f9ancial & manag]ial   
res\rces to consi/5tly (f] advisory     
s]vices to cli5ts t vote %>es held on   
behalf ( %>ehold]s consi/5t ) ! be/     
economic int]e/ ( ^? %>ehold]s1 includ+ 
by fail+ to comply ) subsection 7f7 or  
7g72  7#g7 fails to ma9ta9 adequate     
exp]tise to ensure t proxy advisory     

s]vices = cli5ts t vote %>es held on    
behalf ( %>ehold]s are ti$ to ! be/     
economic int]e/ ( ^? %>ehold]s2 or  7#h7
 engages 9 a prohibit$ act enum]at$ 9   
subsection 7j74  7e7 ,t]m9ation (       
regi/ration  7#a7 ,volunt>y )drawal ,a  
regi/]$ proxy advisory firm may1 ^u su* 
t]ms & conditions z ! ,commission may   
e/abli% z necess>y 9 ! public int]e/ or 
= ! protection ( inve/ors1 :i* t]ms &   
conditions %all include at a m9imum t ! 
regi/]$ proxy advisory firm w no long]  
conduct su* activities z to br+ x )9 !  
def9ition ( proxy advisory firm 9       
section #c7;a77#ha71 )draw f regi/ration
 by fil+ a writt5 notice ( )drawal to ! 
,commission4  7#b7 ,commission au?ority 
,9 addition to any o!r au?ority ( !     
,commission "u ?is title1 if !          
,commission f9ds t a regi/]$ proxy      
advisory firm is no long] 9 exi/5ce or  
has ceas$ to d bus9ess z a proxy        
advisory firm1 ! ,commission1 by ord]1  
%all cancel ! regi/ration "u ?is section
 ( su* regi/]$ proxy advisory firm4  7f7

 ,managem5t ( conflicts ( int]e/  7#a7  
,organization policies & proc$ures ,ea* 
regi/]$ proxy advisory firm %all        
e/abli%1 ma9ta91 & en=ce writt5 policies
 & proc$ures reasonably design$1 tak+   
into consid]ation ! nature ( ! bus9ess (
 su* regi/]$ proxy advisory firm &      
associat$ p]sons1 to publicly disclose &
 manage any conflicts ( int]e/ t arise  
or w\ld reasonably be expect$ to arise f
 su* bus9ess4  7#b7 ,commission au?ority
 ,! ,commission %all1 )9 "o ye> (       
enactm5t1 issue f9al rules to prohibit1 
or require ! managem5t & public         
disclosure (1 any conflicts ( int]e/    
relat+ to ! (f]+ ( proxy advisory       
s]vices by a regi/]$ proxy advisory     
firm1 includ+1 )\t limitation1 conflicts
 ( int]e/ relat+ to-- 7,a7 ! mann] 9 :i*
 a regi/]$ proxy advisory firm is       
comp5sat$ by ! cli5t1 any affiliate ( ! 
cli5t1 or any o!r p]son = provid+ proxy 
advisory s]vices2  7,b7 bus9ess         
relation%ips1 own]%ip int]e/s1 or any   
o!r f9ancial or p]sonal int]e/s betwe5 a

 regi/]$ proxy advisory firm1 or any    
p]son associat$ ) su* regi/]$ proxy     
advisory firm1 & any cli5t1 or any      
affiliate ( su* cli5t2  7,c7 ! =mulation
 ( proxy vot+ policies2  7,d7 !         
execution1 or assi/ance ) ! execution1 (
 proxy votes if su* votes are bas$ ^u   
recomm5dations made by ! proxy advisory 
firm 9 :i* a p]son o!r ?an ! issu] is a 
propon5t2 &  7,e7 any o!r pot5tial      
conflict ( int]e/1 z ! ,commission deems
 necess>y or appropriate 9 ! public     
int]e/ or = ! protection ( inve/ors4    
7#c7 ,disclosure on factors influ5c+    
recomm5dations ,ea* regi/]$ proxy       
advisory firm %all annually disclose to 
! ,commission & make publicly available 
! economic & o!r factors t a reasonable 
inve/or w\ld expect to influ5ce !       
recomm5dations ( su* proxy advisory     
firm1 includ+ ! own]%ip composition (   
su* proxy advisory firm & any meet+s )1 
or fe$back receiv$ f1 outside entities4 
7g7 ,reliability ( proxy advisory firm  
s]vices  7#a7 ,9 g5]al ,ea* regi/]$     

proxy advisory firm %all-- 7,a7 h /aff &
 o!r res\rces suffici5t to produce proxy
 vot+ recomm5dations t are bas$ on      
accurate & curr5t in=mation & design$ = 
cli5ts t vote %>es held on behalf (     
%>ehold]s to advance ! be/ economic     
int]e/ ( ^? %>ehold]s2  7,b7 implem5t   
proc$ures t p]mit issu]s t are ! subject
 ( proxy vot+ recomm5dations-- 7i7      
access 9 a reasonable "t to data &      
in=mation us$ to make recomm5dations2 & 
7ii7 a reasonable opportunity to provide
 mean+ful comm5t & corrections to su*   
data & in=mation1 includ+ ! opportunity 
to pres5t 79 p]son or telephonically7   
details to ! p]son responsible =        
develop+ su* data & in=mation prior to !
 publication ( proxy vot+ recomm5dations
 to cli5ts2  7,c7 employ an ombudsman to
 receive compla9ts ab\t ! accuracy (    
in=mation us$ 9 mak+ recomm5dations f ! 
companies t are ! subject ( ! proxy     
advisory firm's vot+ recomm5dations &   
seek to resolve ^? compla9ts 9 a timely 
fa%ion & prior to ! publication ( proxy 

vot+ recomm5dations to cli5ts2 &  7,d7  
if ! ombudsman is unable to resolve a   
compla9t to a company's satisfaction    
prior to ! publication ( proxy vot+     
recomm5dations to cli5ts1 include 9 !   
f9al report ( ! firm to cli5ts-- 7i7 a  
/atem5t detail+ ! company's compla9ts1  
if reque/$ 9 writ+ by ! company2 &  7ii7
 a /atem5t expla9+ :y ! proxy vot+      
recomm5dation is 9 ! be/ economic int]e/
 ( %>ehold]s4  7#b7 ,def9itions ,9 ?is  
subsection3 7,a7 ,data & in=mation us$  
to make recomm5dations ,! t]m data &    
in=mation us$ to make vot+              
recomm5dations-- 7i7 means ! f9ancial1  
op]ational1 or descriptive data &       
in=mation on an issu] us$ by proxy      
advisory firms & any contextual or      
sub/antive analysis impact+ !           
recomm5dation2 &  7ii7 does n include ! 
entirety ( ! proxy advisory firm's f9al 
report to its cli5ts4  7,b7 ,reasonable 
"t ,! t]m reasonable "t-- 7i7 means n   
less ?an #a week be=e ! publication (   
proxy vot+ recomm5dations = cli5ts2 &   

7ii7 %all n o!rwise int]f]e ) a proxy   
advisory firm's ability to provide its  
cli5ts ) timely access to accurate proxy
 vot+ rese>*1 analysis1 or              
recomm5dations4  7h7 ,private "r (      
action ) respect to illegal             
recomm5dations ,any proxy advisory firm 
t endorses a proposal t is n support$ by
 ! issu] b is approv$ & subsequ5tly f\nd
 by a c\rt ( compet5t jurisdiction to   
violate ,/ate or ,f$]al law %all be     
liable to ! applicable issu] = ! co/s   
associat$ ) ! approval ( su* proposal1  
includ+ implem5tation co/s & any        
p5alties incurr$ by ! issu]4  7i7       
,designation ( compliance (fic] ,ea*    
regi/]$ proxy advisory firm %all        
designate an individual :o reports      
directly to s5ior managem5t z           
responsible = adm9i/]+ ! policies &     
proc$ures t are requir$ to be e/abli%$  
pursuant to subsections 7f7 & 7g71 & =  
ensur+ compliance ) ! securities laws & 
! rules & regulations !reund]1 includ+  
^? promulgat$ by ! ,commission pursuant 

to ?is section4  7j7 ,prohibit$ conduct 
7#a7 ,prohibit$ acts & practices ,n lat]
 ?an "o ye> aft] ! date ( enactm5t ( ?is
 section1 ! ,commission %all issue f9al 
rules to prohibit any act or practice   
relat+ to ! (f]+ ( proxy advisory       
s]vices by a regi/]$ proxy advisory firm
 t ! ,commission det]m9es to be unfair1 
co]cive1 or abusive1 includ+ any act or 
practice relat+ to-- 7,a7 advisory or   
consult+ s]vices 7(f]$ directly or      
indirectly1 includ+ ?r\gh an affiliate7 
relat$ to corporate gov]nance issues2 or
  7,b7 modify+ a vot+ recomm5dation or  
o!rwise dep>t+ f its adopt$ sy/ematic   
proc$ures & me?odologies 9 ! provision (
 proxy advisory s]vices1 bas$ on :e!r an
 issu]1 or affiliate !re(1 subscribes or
 w subscribe to o!r s]vices or product (
 ! regi/]$ proxy advisory firm or any   
p]son associat$ ) su* organization4     
7#b7 ,rule ( con/ruction ,no?+ 9        
p>agraph 7#a71 or 9 any rules or        
regulations adopt$ !reund]1 may be      
con/ru$ to modify1 impair1 or sup]s$e ! 

op]ation ( any ( ! antitru/ laws 7z     
def9$ 9 ! fir/ section ( ! ,clayton     
,act1 except t su* t]m includes section 
#e ( ! ,f$]al ,trade ,commission ,act1  
to ! ext5t t su* section #e applies to  
unfair me?ods ( competition74  7k7      
,/atem5ts ( f9ancial condition ,ea*     
regi/]$ proxy advisory firm %all1 on a  
confid5tial basis1 file ) ! ,commission1
 at int]vals det]m9$ by ! ,commission1  
su* f9ancial /atem5ts1 c]tifi$ 7if      
requir$ by ! rules or regulations ( !   
,commission7 by an indep5d5t public     
auditor1 & in=mation conc]n+ its        
f9ancial condition1 z ! ,commission1 by 
rule1 may prescribe z necess>y or       
appropriate 9 ! public int]e/ or = !    
protection ( inve/ors4  7l7 ,annual     
report  7#a7 ,9 g5]al ,ea* regi/]$ proxy
 advisory firm %all1 n lat] ?an #ij     
cal5d> days aft] ! end ( ea* fiscal ye>1
 file ) ! ,commission & make publicly   
available an annual report 9 su* =m z ! 
,commission1 by rule1 may prescribe z   
necess>y or appropriate 9 ! public      

int]e/ or = ! protection ( inve/ors4    
7#b7 ,cont5ts ,ea* annual report requir$
 "u p>agraph 7#a7 %all include1 at a    
m9imum1 disclosure by ! regi/]$ proxy   
advisory firm ( ! foll[+3 7,a7 ,a li/ ( 
%>ehold] proposals ! /aff ( ! regi/]$   
proxy advisory firm review$ 9 ! prior   
fiscal ye>4  7,b7 ,a li/ ( !            
recomm5dations made 9 ! prior fiscal    
ye>4  7,c7 ,! economic analysis conduct$
 to det]m9e t f9al recomm5dations       
provid$ 9 ! prior fiscal ye> 7o!r ?an   
recomm5dations relat+ to an             
issu]-sponsor$ proposal or              
recomm5dations consi/5t ) t ( a bo>d (  
directors compos$ ( a majority (        
indep5d5t directors7 deliv]$ to cli5ts t
 vote %>es held on behalf ( %>ehold]s 7 
9 ! be/ economic int]e/ ( ^? %>ehold]s4 
7,d7 ,! /aff :o review$ & made          
recomm5dations on su* proposals 9 !     
prior fiscal ye>4  7,e7 ,!              
qualifications ( su* /aff to ensure t   
ea* ( ! recomm5dations = cli5ts t vote  
%>es held on behalf ( %>ehold]s 7 ti$ to

 ! be/ economic int]e/ ( ^? %>ehold]s4  
7,f7 ,! recomm5dations made 9 ! prior   
fiscal ye> :]e ! propon5t ( su*         
recomm5dation 0 a cli5t ( or receiv$    
s]vices f ! proxy advisory firm4  7,g7  
,a c]tification by ! *ief executive     
(fic]1 *ief f9ancial (fic]1 & ! prim>y  
executive responsible = ov]see+ !       
compilation & dissem9ation ( proxy vot+ 
advice t ! f9al recomm5dations 7o!r ?an 
recomm5dations relat+ to an             
issu]-sponsor$ proposal or              
recomm5dations consi/5t ) t ( a bo>d (  
directors compos$ ( a majority (        
indep5d5t directors7 deliv]$ to cli5ts t
 vote %>es held on behalf ( %>ehold]s 9 
! la/ fiscal ye>-- 7i7 7 bas$ on int]nal
 controls & proc$ures t are design$ to  
ensure accurate in=mation & t su*       
int]nal controls & proc$ures are        
effective2  7ii7 d n violate applicable 
,/ate or ,f$]al law2 &  7iii7 7 bas$ on 
! be/ economic int]e/ ( ^? %>ehold]s4   
7,h7 ,! economic & o!r factors t a      
reasonable inve/or w\ld expect to       

influ5ce ! recomm5dations ( su* proxy   
advisory firm1 includ+ ! own]%ip        
composition ( su* proxy advisory firm4  
7m7 ,transp>5t policies ,ea* regi/]$    
proxy advisory firm %all file ) !       
,commission & make publicly available   
its me?odology = ! =mulation ( proxy    
vot+ policies & vot+ recomm5dations to  
cli5ts t vote %>es held on behalf (     
%>ehold]s & h[ t me?odology ensures t ! 
firm's vot+ recomm5dations are 9 ! be/  
economic int]e/ ( ^? %>ehold]s4  7n7    
,rules ( con/ruction ,regi/ration "u &  
compliance ) ?is section does n         
con/itute a waiv] (1 or o!rwise dim9i%1 
any "r1 privilege1 or def5se t a regi/]$
 proxy advisory firm may o!rwise h "u   
any provision ( ,/ate or ,f$]al law1    
includ+ any rule1 regulation1 or ord]   
!reund]4  7o7 ,regulations  7#a7 ,new   
provisions ,su* rules & regulations z   
are requir$ by ?is section or are       
o!rwise necess>y to c>ry out ?is        
section1 includ+ ! application =m       
requir$ "u subsection 7a7-- 7,a7 %all be

 issu$ by ! ,commission1 n lat] ?an #ahj
 days aft] ! date ( enactm5t ( ?is      
section2 &  7,b7 %all become effective n
 lat] ?an #a ye> aft] ! date ( enactm5t 
( ?is section4  7#b7 ,review ( exi/+    
regulations ,n lat] ?an #bgj days aft] !
 date ( enactm5t ( ?is section1 !       
,commission %all-- 7,a7 review its exi/+
 rules & regulations :i* affect !       
op]ations ( proxy advisory firms2 &     
7,b7 am5d or revise su* rules &         
regulations 9 accordance ) ! purposes ( 
?is section1 & issue su* guidance z !   
,commission may prescribe z necess>y or 
appropriate 9 ! public int]e/ or = !    
protection ( inve/ors4  7p7             
,applicability ,?is section1 o!r ?an    
subsection 7n71 :i* %all apply on ! date
 ( enactm5t ( ?is section1 %all apply on
 ! e>li] (-- 7#a7 ! date on :i*         
regulations are issu$ 9 f9al =m "u      
subsection 7o77#a72 or  7#b7 #bgj days  
aft] ! date ( enactm5t ( ?is section4   
7q7 ,be/ economic int]e/ def9$ ,9 ?is   
section1 ! t]m be/ economic int]e/ means

 decisions t seek to maximize inve/m5t  
returns ov] a "t horizon consi/5t ) !   
inve/m5t objectives & risk managem5t    
pr(ile ( ! fund 9 :i* ! %>ehold]s are   
inve/$4  4  7b7 ,con=m+ am5dm5t ,section
 #ag7;a77#a7 ( ! ,securities ,ex*ange   
,act ( #aicd 7#ae ,u4,s4,c4 #ghq7a77#a77
 is am5d$ by ins]t+ proxy advisory firm1
 aft] nationally recogniz$ /ati/ical    
rat+ organization14  7c7 ,proxy advisory
 firm def9itions ,section #c7;a7 ( !    
,securities ,ex*ange ,act ( #aicd 7#ae  
,u4,s4,c4 #gh;c7a77 is am5d$ by add+ at 
! end ! foll[+3  7#hb7 ,proxy advisory  
firm ,! t]m proxy advisory firm-- 7,a7  
means any p]son :o is prim>ily engag$ 9 
! bus9ess ( provid+ proxy vot+ advice1  
rese>*1 analysis1 rat+s1 or             
recomm5dations to cli5ts1 :i* conduct   
con/itutes a solicitation )9 ! mean+ (  
section #ad2 &  7,b7 does n include any 
p]son t is exempt "u law or regulation f
 ! requirem5ts o!rwise applicable to    
p]sons engag$ 9 su* a solicitation4     
7#hc7 ,p]son associat$ ) a proxy        

advisory firm ,) respect to a proxy     
advisory firm-- 7,a7 a p]son is         
associat$ ) ! proxy advisory firm if !  
p]son is-- 7i7 a p>tn]1 (fic]1 or       
director ( ! proxy advisory firm 7or any
 p]son occupy+ a simil> /atus or p]=m+  
simil> functions72  7ii7 a p]son        
directly or indirectly controll+1       
controll$ by1 or "u common control ) !  
proxy advisory firm2  7iii7 an employee 
( ! proxy advisory firm2 or  7iv7 a     
p]son ! ,commission det]m9es by rule is 
controll$ by ! proxy advisory firm2 &   
7,b7 a p]son is n associat$ ) ! proxy   
advisory firm if ! p]son only p]=ms     
cl]ical or m9i/]ial functions ) respect 
to a proxy advisory firm4  4