As Liz shared last week, the White House’s Office of Information and Regulatory Affairs (OIRA) has a dashboard that shows which rules have been sent for interagency review — which is required for significant SEC proposals before they are sent to the Commissioners for a vote. At that time, two proposals were already pending review. Shortly after she directed our attention to that site last week, the SEC sent two more proposed rules to OIRA, and the dashboard now lists “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies” & “Registered Offerings Reform.” Wow! That means four proposed rules are currently pending review:
– Crypto Assets
– Semiannual Reporting
– Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies – Registered Offerings Reform
Let’s talk timing. Liz shared that OIRA review of independent agency rulemaking lasted 17 days on average, with 29 days being the longest, in the last 6 months. That said, OIRA has up to 90 days (which can be extended) to review a rule, and the two SEC proposals submitted a few weeks ago have been pending review since March 20 (Crypto) and March 27 (Semiannual Reporting). All of these are major rulemakings, so I assume they will take some time for the White House and every other agency to review.
Let’s talk substance. We have some inkling of what two of these proposals look like in their current form. Corp Fin Director Jim Moloney shared thoughts on semi-annual reporting and registered offering reform during the ABA Business Law Section’s “Dialogue with the Director” earlier this month. (As always, these are “Jim’s own thoughts,” but we’re hearing consistent messaging in Chair and Commissioner speeches as well.)
Let’s get to know OIRA. Our new regulatory crystal ball, OIRA (pronounced “oh-eye-ruh”), is part of the Office of Management and Budget (OMB) and responsible for coordinating interagency Executive Branch review of significant regulations before publication. It has been around for a long time (so has the dashboard), but as watchers of the SEC, we weren’t accustomed to checking it because the SEC was exempted. That is, until this year, so add this to your bookmarks or know we’ll be regularly checking on your behalf and sharing here.
We’ll also be sharing here when we see some open meetings scheduled or other indications that these proposals are moving forward and heading to the Commissioners. Stay tuned!
On Monday, ISS STOXX announced that it has launched a new website and “brand identity” that is meant to “showcase its comprehensive capabilities while cogently conveying the value proposition of its industry-leading data, research, and technology solutions.” Its new tagline is “Unlock the Power of Data.”
The brand refresh and website launch follow a comprehensive review of ISS STOXX’s market positioning and service structure, feedback from clients, as well as an extensive analysis of the evolving landscape in which global investors operate. This work informed a digital experience and visual identity that present ISS STOXX’s offerings with greater cohesion, while maintaining a familiar and intuitive environment for existing users.
It sounds like the new website will more seamlessly integrate information across its core areas, which are:
ISS STOXX Governance, a premier global provider of independent and objective shareholder meeting research and recommendations
ISS STOXX Sustainability, whose wide-ranging solutions help investors develop and integrate responsible investing policies and practices
ISS STOXX Indices, which sets the standard for rules-based, transparent, and liquid benchmarks and indices, including those tied to STOXX and DAX
ISS Market Intelligence, a leading provider of data, insights, and market engagement solutions to the global financial services industry
ISS-Corporate, which offers data-driven, SaaS-based, and expert advisory solutions to more than 1,400 companies globally
(I’m assuming ISS-Corporate will remain a standalone.) I know that ISS STOXX is committed to maintaining its benchmark policies, but the focus on “the power of data” in this announcement seems at least somewhat reminiscent of Glass Lewis’s announcement that it was moving away from “singularly-focused research and vote recommendations based on its house policy.”
A few days later, ISS STOXX gave some more color to its “power of data” focus by announcing its “2026 roadmap,” which includes new standalone AI solutions, a more customizable ProxyExchange hub and an AI agent named Stu.
ISS STOXX Governance’s forthcoming research offering, “PolicySteward,” will be designed to deliver automated, data-driven voting recommendations, research reports, clear rationale text, and a front-end user interface leveraging AI. Through the new solution, subscribers will enjoy greater independence, transparency, and flexibility regarding how voting decisions are informed and executed. The solution is expected to be available globally beginning in 2027 and fully integrated with ProxyExchange, ISS STOXX Governance’s cutting-edge and end‑to‑end voting platform.
In addition to the standalone PolicySteward offering, ISS STOXX Governance is, in parallel, advancing a broad transformation of ProxyExchange aimed at delivering a more streamlined and intuitive workflow for stewardship and voting activities. Central to this effort is the development of a new, more customizable ProxyExchange hub featuring integrated tools and AI capabilities surfacing more content and expertise. The transformed experience will embed ISS Communicator and ISS Vote Preference, also known as “Vote Choice” or “pass‑through voting,” into screens and workflows, respectively, enabling more effective use of ISS research and engagement tools.
Beta testing is planned for this fall, with early subscribers expected to have time to configure voting policies ahead of 2027 annual meetings.
With Corp Fin clearly working hard to make this the “blockbuster” year for rulemaking that Director Moloney has promised (not to mention the many other developments affecting executive compensation, corporate governance, and disclosures), you do NOT want to miss our pair of popular fall conferences this year. Our 2026 Proxy Disclosure & 23rd Annual Executive Compensation Conferences will be held on October 12th and 13th, virtually and in person in Orlando! We’ve now posted the agendas and speakers. Here’s a sampling of what’s on tap.
– Christina Thomas: The Latest From Corp Fin
– The SEC All-Stars: Proxy Season Insights
– The Fate of Shareholder Proposals
– Fireside Chat with Top Activism Defense Lawyers
– Scary Stories!
– Trends in Tokenization & Blockchain
– SRCs, EGCs & FPIs: What’s Next?
– Keeping Governance in Focus When the Future is Hazy
– The SEC All-Stars: Executive Pay Nuggets
– Your Compensation Disclosures: New & Improved (We Hope)!
– The Top Compensation Consultants Speak
– Navigating ISS & Glass Lewis
Check out the full agenda for all the details. But also know that our speakers are nimble, and we’ll make sure our conferences cover developments between now and October, of which there may be many, including the major rulemaking proposals on deck. Our conferences will be a great opportunity to understand how new rules and other evolving developments could affect your company and board – and to talk with fellow practitioners about how they’re adapting and preparing.
Register online at our conference page or contact us at info@CCRcorp.com or 1-800-737-1271. Sign up soon to take advantage of the early bird rate!
As John previewed, the SEC’s Small Business Capital Formation Advisory Committee held a meeting yesterday that was all about figuring out how to encourage more IPOs. Chairman Atkins shared remarks, as did Commissioners Peirce and Uyeda. Here are some of the ideas to make IPOs more attractive, particularly for smaller-cap companies, that were shared during the meeting:
– Expand an IPO light option for companies with modest revenues, a smaller market cap and a straightforward business model. For example, expand scaled disclosure, allow shorter registration statements, simplify compensation disclosure, streamline internal controls requirements and reduce filing burdens while a newly public company grows. The rules should be revised to go beyond the current accommodations for emerging growth companies (EGCs) and smaller reporting companies (SRCs).
– Help companies move more quickly in an IPO so they can move more opportunistically and take advantage of market windows. For example, eliminate or shorten the 15 day period between the public filing and roadshow, permit a tiered review by the SEC Staff, expand safe harbors for communications around an offering and do away with the requirement to include executive pay disclosures in the beginning of a new fiscal year before new financial statements are required.
– Reconsider quarterly reporting requirements. Permitting semiannual reporting plus current reporting for material events would preserve transparency while reducing unnecessary expense for smaller issuers.
– Improve capital raising opportunities after IPO. For example, incentivize analyst coverage for small issuers so that being public really does facilitate capital formation for those smaller cap companies. Also, while moving to a company registration model might seem pretty radical, if a company could move right to a prospectus supplement, that would be a meaningful improvement. Otherwise, access to shelf registration should be expanded so companies are eligible at 6 months post-IPO, with aligns with lock-up expiration.
– Reform the shareholder litigation landscape. One speaker suggested that the U.S. consider Canada’s loser pays framework for shareholder litigation to discourage weak cases that may be filed to pressure settlements.
– Improve communication & education about why going public is beneficial in the short- and long-term. Reform is needed but changing perception is also necessary.
– Enhance dual listing benefits – smaller companies are not inclined to dual list because it’s so burdensome.
– Views were mixed about whether private markets need to be reformed to make IPOs more attractive, which was referred to as a “Champagne Problem.” It’s so easy to stay private and raise and return capital as a private company nowadays that board members, venture funds, etc. are no longer pushing for IPOs. Making it easier to be a public company may not be enough to encourage smaller cap IPOs.
– Improve early price discovery, for example, by permitting earlier analyst-led investor engagement.
In January, John blogged about Nasdaq’s proposal to impose a $5 million minimum market cap requirement on companies listed on Nasdaq’s Global and Capital Markets. It then extended the time to act on this proposal back in March, and yesterday, the day before the Commission was required to take action, an order was posted instituting proceedings under Section 19(b)(2)(B) of the Exchange Act to determine whether to approve or disapprove the proposed rule change.
I should point out that the new minimum would be added to Rules 5450(a) and 5550(a), which apply across the board for all listed companies regardless of which continued listing standard they qualify for (Equity, Market Value of Listed Securities or Net Income). Currently, companies that satisfy the Equity Standard or the Net Income Standard do not need to meet a minimum Market Value of Listed Securities. So, if the tables on pages 3 and 4 of this continued listing guide were updated to reflect this proposed change, I believe we’d see the $5 million Market Value of Listed Securities requirement across all three columns on both pages.
As Dave noted, these orders are pretty unusual — although we’ve had this happen with a few in recent years. Basically, the Commission is providing Nasdaq with notice of potential grounds for disapproval and soliciting additional comment on specific areas of concern — with a new deadline for those additional comments (21 days after publication in the Federal Register) and rebuttals (35 days after publication in the Federal Register). It does not indicate that the Commission has reached any conclusions but finds institution of proceedings is appropriate in light of the legal and policy issues raised by the proposed rule change.
Beginning on page 7, the order reviews the comments received to date. While two were supportive, other comment letters expressed many concerns, including:
– That the proposal doesn’t provide evidence in support of the proposed $5 million threshold, “such as evidence demonstrating that issuers below the proposed threshold are financially distressed or pose heightened risks to investors that are not already addressed by existing Nasdaq and Commission requirements”
– That other recently adopted rule changes were already designed to address the same “low-valuation risk factors identified in the proposal,” such as the reverse stock split and bid price requirements
– That the minimum MVLS would hurt listed companies’ ability to raise capital
– That the rule change might encourage companies to “seek listing on less regulated venues, rely more heavily on private capital markets with reduced transparency, or delay or forgo public listing” or “engage in value-distorting actions,” including “reverse stock splits, overly dilutive financings, excessive marketing campaigns or premature asset sales”
– That the minimum MVLS and automatic suspension after 30 days might increase manipulative trading
– That removing the stay during a hearing request renders the appeal rights “illusory”
In terms of further input sought, the order says:
The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in the Notice, in addition to any other comments they may wish to submit about the proposed rule change. In particular, the Commission seeks comment on whether the proposal includes sufficient analysis to support a conclusion that the proposal to immediately suspend and delist companies that fail to comply with the MVLS Requirement, to maintain the suspension of such companies’ securities from trading during the pendency of an appeal to the Hearings Panel, and to limit the Hearings Panel’s discretion to reverse a delisting decision to circumstances involving a factual error is designed to be consistent with the requirements of Section 6(b)(5) and Section 6(b)(7) of the Act or raises any new or novel concerns not previously contemplated by the Commission.
The March-April issue of the Deal Lawyers newsletter was just sent to the printer and is also available online to members of DealLawyers.com who subscribe to the electronic format. This issue includes the following articles:
– Delaware Case Applying Indemnification Materiality Scrape Creates Risks for the Unwary
– Special Committees in Conflict Transactions: A Practical Guide
– The 2026 Proxy Disclosure & 23rd Annual Executive Compensation Conferences
The Deal Lawyers newsletter is always timely & topical – and something you can’t afford to be without to keep up with the rapid-fire developments in the world of M&A. If you don’t subscribe to Deal Lawyers, please email us at info@ccrcorp.com or call us at 800-737-1271.
Communications consultant Kekst CNC recently announced the results of its analysis of voting recommendations from four major LLMs across nearly 50 recent proxy fights, comparing those recommendations with proxy advisor recommendations and actual voting outcomes. You might be surprised to hear that “AI is meaningfully more likely to articulate support for activists than traditional proxy advisors – as well as real proxy contest outcomes.” Specifically:
– AI recommended for the activist’s nominees more often than the company’s (45% of cases versus 37%)
– AI recommended for the activist far more often than the two major proxy advisory firms, with ISS and Glass Lewis recommending the company’s nominees in about 55% of the cases and for the activist in 36% and 42% of the cases, respectively
– The activist prevailed in final voting tallies only 14% of the time
“AI favors activists 45%” is the wrong scoreboard. What matters is whether AI can faithfully reflect your firm’s voting policy, view and voice. An agent tuned for a long-horizon index steward might vote differently from one tuned for an event-driven fund. Default settings produce default answers, and investors’ unique voices deserve better.
But from a company perspective, this info is helpful as they consider how shifting voting dynamics might influence their outcomes. These LLMs weren’t fed any particular voting policy, so the way these recommendations came out in this test might be most indicative of what a retail holder would receive from an LLM. Complicating things, each LLM seemed to have different focus areas and biases (and even the same query yielded different results from the same LLM some of the time). For example:
Claude frequently values the relevant experience of dissident director nominees and the track record of the activists. Gemini is more likely to appreciate management’s desire to avoid disruption at critical moments – or call out when independent shareholder accountability is needed to force change.
Despite the different approaches of the four tested LLMs, Kekst CNC was still able to analyze the sources most commonly cited by these models and share some generally applicable communications takeaways for public companies. For example, these LLMs didn’t assign the same weight to arguments and resources that have historically been highly influential.
[T]wo traditionally core arguments have only relatively moderate influence for AI, each seeing around 25% frequency in promanagement votes:
– Lack of credibility or experience attributed to the activist fund itself (separate from its nominees). It is particularly worth highlighting that in very few cases did AI cite procedural or tactical accusations against activists – such as suspicious timing of actions taken, trading activity/disclosures, or track record of unconstructive engagement with the board.
– Expertise and track record of the board’s nominees. The vast majority of the time, AI did not attempt to compare the two sides’ nominees. In cases where director nominee quality was a factor, the rationale was either rounding out skills central to the company’s strategy, or a desire to avoid disruption of the board’s oversight of ongoing progress.
In addition, certain arguments frequently relied upon by issuers to question the motives of activists hold minimal weight among the LLMs. The short-term nature of an activist’s position, or the activist not representing the true interests of shareholders, was mentioned in just 5% of pro-management votes.
And, it’s not just what you say, it’s how you say it – and possibly even how many times.
The single most important channel to articulate arguments that affect AI recommendations is the press release [. . .] Releases represented nearly one-third of all citations informing AI responses – whether through direct links to the newswires through which they were issued, or through full reprints on automated websites. Notably, the analysis did not uncover obvious volume “fatigue” among engines, i.e., consuming a maximum number of press releases to inform its recommendations. The breadth of attribution was typically a function of the depth of the engine’s analysis – Gemini’s analyses are more detailed, for example, while Perplexity’s are shallower. Sourcing can also change meaningfully when running the same search multiple times or by different users.
A valuable subject for further study and testing is whether companies and activists should consider increasing their rate of press release issuance in contested situations to “flood the zone” with content deemed most credible by AI engines.
Less impactful on AI decision making are the “fight deck” and major business publications, which seemed to be drowned out by the “flood of digital content [that] exists in the public domain that both dwarfs volume of ‘sophisticated’ media, and continues to hold meaningful credibility by LLMs.”
This a16z Substack points out that proxy advisor influence may be waning (and the vote outcome goes the way of the activist only 14% of the time). That said, the Kekst CNC report says not to write off proxy advisors just yet:
The approach of treating AI as proxy advisors should not downplay the critical role of the traditional proxy advisors, which remain broadly used among institutions. The LLMs themselves certainly do not underestimate the value of ISS and Glass Lewis: well more than half of all chatbot responses noted their outcomes as a dispositive factor. All sides in a contest should prioritize highlighting favorable recommendations and supporting language from the proxy advisors, through press releases and any other channels that could be influential in LLM analysis.
This report is focused on proxy fights, but AI use is impacting uncontested elections and other proposals. Yesterday on CompensationStandards.com, Liz blogged about how say-on-pay outcomes are impacted by investors’ use of AI.
We usually cover “big A” activism on DealLawyers.com, so head there for more info on activism. For more on the latest and greatest proxy voting and engagement trends, see our “Proxy Season” Practice Area here on TheCorporateCounsel.net.
The growing list of public companies proposing to move from Delaware to another jurisdiction of incorporation indicates that “DExit” remains a live topic among boards and management teams. In our latest “Timely Takes” podcast, FTI Consulting’s Garrett Muzikowski & Andrea Hearon joined John to discuss a variety of legal and business issues that companies considering migrating out of Delaware should consider. Topics addressed in this 25-minute podcast include:
– Pros and Cons of Reincorporating Outside of Delaware
– What Boards Often Misunderstand About the DExit Decision
– Reasons for DExit Proposals and Outcomes of Stockholder Votes
– Emerging Patterns in Proxy Advisor and Institutional Investor Responses
– How Boards Should Approach Texas’s Optional Provisions
– Importance of a Communications Strategy
– Will DExit Become Mainstream or Remain a Niche Response?
As always, if you have insights on a securities law, capital markets or corporate governance issue, trend or development that you’d like to share in a podcast, we’d love to hear from you. You can email me and/or John at mervine@ccrcorp.com or john@thecorporatecounsel.net.
Earlier this month, Broadridge announced that it is extending its governance platform to support digital assets – which means that public companies and investors can manage proxy voting, corporate actions and disclosures across both traditional and tokenized securities with existing platforms and workflows. And this is not theoretical. Galaxy Digital (the first U.S. public company to issue native tokenized equity on a major public blockchain) will use ProxyVote for its annual meeting scheduled for May 28. Its CEO says, “With Broadridge, we’re combining the credibility of traditional market infrastructure with the advantages of blockchain to deliver a more efficient model for shareholders.” Here’s more from the announcement:
The platform introduces corporate actions for tokenized assets, starting with proxy voting, which will be recorded on Broadridge’s Avalanche based L1 and then distributed across multiple blockchains. Integrating Broadridge’s ProxyVote platform into digital wallets, investors can receive materials, confirm their holdings and submit votes, all with a transparent and verifiable record.
To simplify the annual meeting process for public companies issuing tokenized shares alongside traditional shares, Broadridge’s solution consolidates voting across registered, beneficial, and tokenized holdings into a single view for issuers. This “single pane of glass” approach removes fragmentation and enables consistent oversight of governance activity regardless of how assets are held. The platform is designed to support all forms of tokenization, including both issued-sponsored tokenized securities and third party-sponsored tokenized securities, ensuring compatibility with evolving market models.
Today’s announcement underscores Broadridge’s commitment to accelerating the adoption of digital assets across the financial services landscape. Building on its industry-leading role in tokenizing US$8 Trillion in assets per month, Broadridge also enables on-chain proxy voting and governance, digital asset post-trade infrastructure, and the scaling of digital asset capabilities across multiple asset classes. Through these innovations, Broadridge is helping traditional financial institutions unlock the next era of digital asset investing.
Galaxy’s tokenized Class A common stock is a small percentage of its outstanding shares (13,404 of 191.8 million Class A shares outstanding), but these shares get special treatment in the proxy. The company added some disclosure to explain their unique circumstances:
Tokenized Stockholders. Holders of Tokenized GLXY will receive voting instructions via email. Such stockholders may vote through the Tokenized ProxyVote website referenced in the email by connecting the wallet(s) that hold their Tokenized GLXY to the website, making their voting elections, and cryptographically signing their votes via their wallet. If a tokenized stockholder is unable to connect their wallet(s), they may instead vote via www.ProxyVote.com using their control number included in the email.
If you are a holder of Tokenized GLXY, in addition to the four options above, you can also vote by the following method: through the Tokenized ProxyVote website at www.token-vote.com, 24 hours a day, seven days a week, until 9:00 a.m. Eastern Time on May 27, 2026, by connecting the wallet(s) that hold your Tokenized GLXY to the website and cryptographically signing your votes via your wallet(s).
