Proxy Advisory Transparency Act

2025-2026 Bill 4985: Proxy Advisory Transparency Act - South Carolina Legislature Online

South Carolina General Assembly
126th Session, 2025-2026
Download
This Bill
in Microsoft Word Format
Indicates Matter Stricken
Indicates New Matter
H. 4985
STATUS INFORMATION
General Bill
Sponsors: Reps. B. Newton and M.M. Smith
Document Path: LC-0298HDB26.docx
Introduced in the House on January 20, 2026
Currently residing in the House
Summary: Proxy Advisory Transparency Act
HISTORY OF LEGISLATIVE ACTIONS

Date

Body

Action Description with journal page number

1/20/2026

House

Introduced and read first time (
House Journal-page 7
)

1/20/2026

House

Referred to Committee on
Labor, Commerce and Industry
(
House Journal-page 7
)

2/11/2026

House

Member(s) request name added as sponsor: M.M. Smith

View the latest
legislative information
at the website
VERSIONS OF THIS BILL
01/20/2026

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS
BY ENACTING THE "PROXY ADVISOR TRANSPARENCY ACT" BY ADDING ARTICLE 9 TO CHAPTER
5, TITLE 39 SO AS TO REQUIRE PROXY ADVISORS TO ISSUE SPECIFIED DISCLOSURES WHEN
MAKING CERTAIN RECOMMENDATIONS WITHOUT RELYING ON A WRITTEN FINANCIAL ANALYSIS;
AND TO PROVIDE THAT A VIOLATION OF THIS ARTICLE IS A DECEPTIVE TRADE PRACTICE
SUBJECT TO THE INVESTIGATORY AND ENFORCEMENT POWERS OF THE ATTORNEY GENERAL, AS
WELL AS A PRIVATE RIGHT OF ACTION BY ANY AGGRIEVED PERSON.

B
e it enacted by the General Assembly of the State of South Carolina:

S
ECTION 1.
C
hapter 5, Title 39 of the
S.C. Code is amended by adding:

A
rticle 9

P
roxy Advisor
Transparency Act

S
ection
39-5-900
.
A
s used in this article:

(
A) "Company" means a publicly traded,
for-profit corporation, limited liability company, partnership, or other
business entity.

(
B) "Company proposal" means any
proposal made by a company to its shareholders that is included in the
company's proxy statement including, but not limited to, director nominations
or elections, or any proposal relating to director nominations or elections,
executive compensation, corporate transactions, corporate structure, auditor
selection, or company policy on any subject.

(
C) "Default recommendation or policy"
means a system, set of rules, principles, or guidelines designed to assist with
voting decisions on any company proposals or proxy proposals.

(
D) "Proxy advisor" means a person who,
for compensation, provides a proxy advisory service to shareholders of a
company or to other persons with authority to vote on behalf of shareholders of
a company.

(
E) "Proxy advisory service" means any
of the following services that are provided with or in relation to a company,
or are provided to any person in this State:

(
1) advice or a recommendation on how
to vote on a company proposal or proxy proposal;

(
2) proxy statement research and
analysis regarding a company proposal or proxy proposal; or

(
3) development of proxy voting
recommendations or policies, including establishing default recommendations or
policies.

(
F) "Proxy proposal" means any proposal
made by a shareholder of a company that is included in the company's proxy
statement including, but not limited to, a proposal relating to any of the
subjects that could be covered by a company proposal.

(
G) "Shareholder" includes a
shareholder, unitholder, limited partner, or other equity owner of a company.

(
H) "Written financial analysis" means
a written document that:

(
1) analyzes the expected short-term
and long-term financial benefits and costs to the company of implementing a
company proposal or proxy proposal;

(
2) concludes what vote or course of
action is most likely to positively affect shareholder value; and

(
3) explains the methods and processes
used to prepare the analysis, including the experience and geographic location
of the personnel who formed the recommendation.

S
ection
39-5-910
.
(
A) If a proxy advisor
makes a recommendation against company management on a company proposal or
proxy proposal, or makes a default recommendation or policy involving votes
against company management on company proposals or proxy proposals, and the
proxy advisor does not do so based on a written financial analysis, the proxy
advisor shall:

(
1) concurrently with providing the
proxy advisory service, include a clear and conspicuous disclosure to each
shareholder, or entity, or other person acting on behalf of a shareholder,
receiving the proxy advisory service that:

(
a) identifies the service being
provided;

(
b) identifies the recommendation or
policy at issue; and

(
c) states that the proxy advisor has
made the recommendation or policy without doing so based on a written financial
analysis regarding the impact of that recommended action on company investors
that:

(
i) analyzes the expected short-term
and long-term financial benefits and costs to the company of implementing the
company proposal or proxy proposal;

(
ii) concludes what vote or course of
action is most likely to positively affect shareholder value; and

(
iii) explains the methods and
processes used to prepare the analysis, including the experience and geographic
location of the personnel who formed the recommendation.

(
2) for a proxy advisory service
covered by Section
39-5-900
(E)(1) or (2), concurrently with providing the proxy
advisory service, provide the disclosure under subsection (A)(1) to the board
of directors of each company that is the subject of the service; and

(
3) while any proxy advisory services
described by subsection (A) are being provided, publicly and conspicuously
disclose on the home or front page of the proxy advisor's website a statement
that the advisor's proxy advisory services include one or more services that
include recommendations or policies against company management on company
proposals or proxy proposals that are not made based on a written financial
analysis regarding the impact of that recommended action on company investors
that:

(
a) analyzes the expected short-term
and long-term financial benefits and costs to the company of implementing the
company proposal or proxy proposal;

(
b) concludes what vote or course of
action is most likely to positively affect shareholder value; and

(
c) explains the methods and processes
used to prepare the analysis, including the experience and geographic location
of the personnel who formed the recommendation.

(
B) If a proxy advisor makes a
recommendation against company management on a company proposal or proxy
proposal, or makes a default recommendation or policy involving votes against
company management on company proposals or proxy proposals, and the proxy
advisor does so based on a written financial analysis, the proxy advisor shall:

(
1) concurrently with providing the
proxy advisory service, include a clear and conspicuous disclosure to each
shareholder, or entity or other person acting on behalf of a shareholder,
receiving the proxy advisory service that:

(
a) identifies the service being
provided;

(
b) identifies the recommendation or
policy at issue;

(
c) states that the proxy advisor has
made the recommendation or policy based on a written financial analysis that:

(
i) analyzes the expected short-term
and long-term financial benefits and costs to the company of implementing the
company proposal or proxy proposal;

(
ii) concludes what vote or course of
action is most likely to positively affect shareholder value; and

(
iii) explains the methods and
processes used to prepare the analysis, including the experience and geographic
location of the personnel who formed the recommendation; and

(
d) states that the analysis is
available upon request;

(
2) make such analysis available within
a reasonable time to any recipent of the proxy advisory service upon request;

(
3) for a proxy advisory service
covered by Section
39-5-900
(E)(1) or (2), concurrently with providing the proxy
advisory service, provide a copy of such analysis to the board of directors of
each company that is the subject of the service.

S
ection
39-5-920
.
(
A) A violation of this
chapter is a deceptive act or practice under Article 1 of this chapter, and is
actionable under the enforcement provisions of that article. The Attorney
General may exercise all investigative powers under that article if the
Attorney General has reason to believe a violation has occurred, is occurring,
or is about to occur.

(
B) In addition to enforcement under
subsection (A), any person aggrieved by a violation of this article may bring
an action seeking a declaratory judgment or injunctive relief against a proxy
advisor who violates this chapter. No later than the seventh day after the date
on which an action is brought under this subsection, the plaintiff shall
provide written notice to the Attorney General, who has a right to intervene in
the action. For purposes of this subsection, an aggrieved person includes:

(
1) a recipient of proxy advisory
services provided by the proxy advisor;

(
2) a company that is the subject of
proxy advisory services covered by Section
39-5-900
(E)(1) or (2) provided by
the proxy advisor; and

(
3) any shareholder, unitholder,
limited partner, or other equity owner of a company covered by subsection
(B)(2).

S
ECTION
2. This act takes effect upon approval by the Governor.

----XX----

This web page was last updated on January 20, 2026 at 12:36 PM