MFA and the Alternative Investment Management Association (AIMA) submitted a joint letter to SEC on February 3 in response to its proposal on proxy voting advice. The letter states that while MFA and AIMA support ensuring that proxy voting advice is accurate, the Associations recommend that the SEC avoid making any changes that would lead to unnecessary delays, costs, or legal uncertainty that could make it more difficult for fund managers to obtain high quality proxy voting advice for the benefit of clients on whose behalf fund managers make voting determinations. In particular, the Associations recommend that the SEC narrow the scope of the proposed review and feedback process to apply exclusively to factual information in proxy voting advice, and enhance legal certainty for proxy advisory firms in Rule 14a-9 under the Exchange Act.
MFA and AIMA express support for the proposed additional disclosure of material conflicts of interest by proxy advisory firms, which the Associations believe will provide additional useful information to fund managers. The Associations also support the confirmation in previous SEC guidance on proxy voting for investment advisers that an investment adviser is not obligated to vote a proxy if it determines that voting is not in the best interest of the client.