Bill Text: MS SB2676 | 2026 | Regular Session | Engrossed
Bill Title: Proxy Advisor Transparency Act; enact.
Sponsorship: Partisan Bill (Republican 1)
Status: (Failed) 2026-03-30 - Died In Conference [SB2676 Detail]
Download: Mississippi-2026-SB2676-Engrossed.html
MISSISSIPPI LEGISLATURE
2026 Regular Session
To: Business and Financial Institutions
By: Senator(s) Harkins
Senate Bill 2676
(As Passed the Senate)
AN ACT TO ENACT THE PROXY ADVISOR TRANSPARENCY ACT; TO DEFINE "PROXY ADVISOR," "PROXY ADVISORY SERVICE" AND ADDITIONAL TERMS USED IN THIS ACT; TO REQUIRE CERTAIN DISCLOSURES TO SHAREHOLDERS WHEN A PROXY ADVISOR MAKES A RECOMMENDATION THAT IS BASED OR IS NOT BASED ON A WRITTEN FINANCIAL ANALYSIS; TO PROVIDE THAT VIOLATIONS OF THIS ACT CONSTITUTE AN ACTIONABLE DECEPTIVE TRADE PRACTICE; TO AMEND SECTION 75-24-5, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Proxy Advisor Transparency Act."
SECTION 2. It is the sense of the Legislature that:
(a) When shareholders hire professionals to manage investments, they reasonably expect that the service provider will perform those services in the financial interest of the shareholders, and that the service provider will make recommendations based on financial analysis of which actions would enhance investment value.
(b) There is a particular need for disclosures for proxy voting advice because such advice is often provided for hundreds or thousands of shareholder votes each year, and few investors have the resources to research every shareholder vote, so investors often use proxy advisors for guidance on how to exercise fiduciary duties.
(c) Many companies hire proxy advisors pursuant to the Department of Labor's long-standing conclusion that, under the Employee Retirement Income Security Act, the "fiduciary obligations of prudence and loyalty to plan participants and beneficiaries require the responsible fiduciary to vote proxies on issues that may affect the value of the plan's investment."
(d) Directors of publicly-held companies owe fiduciary duties to shareholders, and make recommendations in line with those fiduciary duties.
(e) Nevertheless, proxy advisors have recommended votes against company management, including votes for shareholder proposals related to environmental, social and governance (ESG) issues; diversity, equity and inclusion (DEI) issues; and social credit and sustainability scores; but have not disclosed to clients that the recommendations were made without conducting a financial analysis to determine how these votes would affect shareholder value.
(f) In fact, the chief operating officer of Glass Lewis & Co., a major proxy advisor, stated under penalty of perjury that Glass Lewis does not conduct a written financial analysis before recommending votes on shareholder proposals, and that other proxy advisors do not do so either. Yet proxy advisors have advertised that the purpose of their recommendations is maximizing, increasing or protecting shareholder value.
(g) These facts raise concern that proxy advisors are engaged in fraudulent or deceptive practices and are not disclosing material information to their clients, who otherwise would reasonably believe that they are choosing between recommendations of management and a proxy advisor that are based on dueling financial analyses.
(h) Investors purchasing proxy voting services should be informed when recommendations against management are or are not being based on financial analyses that consider the effect on the value of the plan's investment. Investors also should be able to access those analyses upon request, in order to assess whether the analyses were sufficient to uphold fiduciary standards.
(i) Requiring proxy advisors to provide clear, factual disclosures under these circumstances helps investors evaluate whether the proxy advisor's recommendations uphold investors' fiduciary duties of prudence and loyalty.
(j) Requiring proxy advisors to inform companies of these recommendations also promotes disclosures in line with fiduciary duties. For example, a company that is the subject of a shareholder proposal often has additional information regarding whether a proposal is in the shareholder's financial interests or regarding the costs of a proposal, and notice of a proxy advisor's recommendation allows the company to provide additional responsive information to shareholders seeking to uphold their fiduciary duties.
SECTION 3. As used in this act, the following terms shall have the meaning ascribed herein:
(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 in connection with or in relation to a company, or are provided to any person in this state:
(i) Advice or a recommendation on how to vote on a company proposal or proxy proposal;
(ii) Proxy statement research and analysis regarding a company proposal or proxy proposal; or
(iii) 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:
(i) Analyzes the expected short-term and long-term financial benefits and costs to the company of implementing a company proposal or proxy proposal;
(ii) Concludes which 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.
SECTION 4. (1) 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:
(a) 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:
(i) Identifies the service being provided;
(ii) Identifies the recommendation or policy at issue;
(iii) 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:
1. Analyzes the expected short-term and long-term financial benefits and costs to the company of implementing the 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.
(b) For a proxy advisory service described in Section 3(e)(i) or (ii) of this act, concurrently with providing the proxy advisory service, provide the disclosure under subsection (1)(a) of this section to the board of directors of each company that is the subject of the service; and
(c) While any proxy advisory services described by subsection (1) of this section 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:
(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 which 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) 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:
(a) 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:
(i) Identifies the service being provided;
(ii) Identifies the recommendation or policy at issue;
(iii) States that the proxy advisor has made the recommendation or policy based on a written financial analysis that:
1. Analyzes the expected short-term and long-term financial benefits and costs to the company of implementing the company proposal or proxy proposal;
2. Concludes which vote or course of action is most likely to positively affect shareholder value;
3. Explains the methods and processes used to prepare the analysis, including the experience and geographic location of the personnel who formed the recommendation; and
(iv) States that the analysis is available upon request;
(b) Make such analysis available within a reasonable time to any recipient of the proxy advisory service upon request; and
(c) For a proxy advisory service described in Section 3(e)(i) or (ii) of this act, 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.
SECTION 5. (1) A violation of this act is a deceptive trade practice under Section 75-24-5 and is actionable under the enforcement provisions contained in Chapter 24, Title 75, Mississippi Code of 1972. The Attorney General may exercise all investigative powers which are available to the Attorney General if he or she has reason to believe a violation of this act has occurred, is occurring or is about to occur.
(2) In addition to enforcement under subsection (1) of this section, any person aggrieved by a violation of this act may bring an action seeking a declaratory judgment or injunctive relief against a proxy advisor who violates this act. Not later than seven (7) days after the date on which an action is brought under this subsection (2), the plaintiff shall provide written notice to the Attorney General, who shall have the right to intervene in the action. For purposes of this subsection (2), an aggrieved person includes:
(a) A recipient of proxy advisory services provided by the proxy advisor;
(b) A company that is the subject of proxy advisory services described in Section 3(e)(i) or (ii) of this act provided by the proxy advisor; and
(c) Any shareholder, unitholder, limited partner or other equity owner of a company described in subsection (2)(b) of this section.
SECTION 6. The provisions of this act apply only to a proxy advisory service provided on or after the effective date of this act. Nothing in this law eliminates any claim under Chapter 24, Title 75, Mississippi code of 1972, regardless of whether that claim accrues before or after the effective date of this act.
SECTION 7. It is the intent of the Legislature that Sections 1 through 7 of this act shall operate with equal force and shall be severable one from the other and that, in the event that any provision of this act shall be held invalid or unenforceable by a court of competent jurisdiction, such provision shall be deemed severable and the remaining provisions of this act deemed fully enforceable.
SECTION 8. Section 75-24-5, Mississippi Code of 1972, is amended as follows:
75-24-5. (1) Unfair methods of competition affecting commerce and unfair or deceptive trade practices in or affecting commerce are prohibited. Action may be brought under Section 75-24-5(1) only under the provisions of Section 75-24-9.
(2) Without limiting the scope of subsection (1) of this section, the following unfair methods of competition and unfair or deceptive trade practices or acts in the conduct of any trade or commerce are hereby prohibited:
(a) Passing off goods or services as those of another;
(b) Misrepresentation of the source, sponsorship, approval, or certification of goods or services;
(c) Misrepresentation of affiliation, connection, or association with, or certification by another;
(d) Misrepresentation of designations of geographic origin in connection with goods or services;
(e) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he does not have;
(f) Representing that goods are original or new if they are reconditioned, reclaimed, used, or secondhand;
(g) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(h) Disparaging the goods, services, or business of another by false or misleading representation of fact;
(i) Advertising goods or services with intent not to sell them as advertised;
(j) Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;
(k) Misrepresentations of fact concerning the reasons for, existence of, or amounts of price reductions;
(l) Advertising by or on behalf of any licensed or regulated health care professional which does not specifically describe the license or qualifications of the licensed or regulated health care professional;
(m) Charging an increased premium for reinstating a motor vehicle insurance policy that was cancelled or suspended by the insured solely for the reason that he was transferred out of this state while serving in the United States Armed Forces or on active duty in the National Guard or United States Armed Forces Reserve. It is also an unfair practice for an insurer to charge an increased premium for a new motor vehicle insurance policy if the applicant for coverage or his covered dependents were previously insured with a different insurer and canceled that policy solely for the reason that he was transferred out of this state while serving in the United States Armed Forces or on active duty in the National Guard or United States Armed Forces Reserve. For purposes of determining premiums, an insurer shall consider such persons as having maintained continuous coverage. The provisions of this paragraph (m) shall apply only to such instances when the insured does not drive the vehicle during the period of cancellation or suspension of his policy;
(n) Violating the provisions of Section 75-24-8;
(o) Violating the provisions of Section 73-3-38;
(p) Violating any of
the provisions of Title 41, Chapter 149, Mississippi Code of 1972; * * *
(q) Violating any of
the provisions of Title 45, Chapter 38, Mississippi Code of 1972 * * *;
(r) Violating any of
the provisions of Title 41, Chapter 151, Mississippi Code of 1972 * * *; and
(s) Violating any of the provisions of Section 1 through 7 of this act.
SECTION 9. This act shall take effect and be in force from and after July 1, 2026, and shall stand repealed on June 30, 2026.
