V07 · Stream 06 · Channel 3
Source-status hierarchy · multi-layerProxy-advisor regulation: the vote-advice channel under pressure.
This page tracks the multi-layer regulatory and litigation environment around proxy voting advice. The federal layer involves SEC Rule 14a-1(l) (solicitation definition), Rule 14a-2(b)(9) (exemption conditions), and Rule 14a-9 (anti-fraud), with the 2020 and 2022 SEC rulemakings now subject to two appellate decisions: NAM v. SEC (5th Cir. June 26, 2024) partially vacated the 2022 rescission, and ISS v. SEC (D.C. Cir. July 1, 2025) held that proxy voting advice is not solicitation under Section 14(a). The state layer includes Texas S.B. 2337 / TBOC Chapter 6A, which is now enjoined as to ISS and Glass Lewis by preliminary-injunction orders entered by the Western District of Texas on August 29, 2025. The executive and antitrust layer includes Executive Order 14366 (Dec. 11, 2025) and press-reported FTC scrutiny that has not yet produced a publicly docketed enforcement proceeding.
HEADLINE FINDING · AS OF JUNE 2, 2026
The federal proxy-advice framework now turns on three rule provisions (Rule 14a-1(l), 14a-2(b)(9), 14a-9), two appellate rulings going opposite directions (NAM v. SEC, 5th Cir. June 26, 2024 — partial vacatur of the 2022 rescission; ISS v. SEC, D.C. Cir. July 1, 2025 — proxy voting advice held not "solicitation" under Section 14(a)), an enacted Texas statute (S.B. 2337 / TBOC ch. 6A) currently enjoined as to ISS and Glass Lewis, Executive Order 14366, and press-reported (not officially docketed) FTC scrutiny.
- 14a-1(l) · 14a-2(b)(9) · 14a-9Proxy-advice rule framework (solicitation, exemption, anti-fraud)
- ISS v. SECD.C. Cir. July 1, 2025 — advice not "solicitation"; 2020 def’l rule invalidated
- TBOC ch. 6ATexas S.B. 2337 (signed June 20, 2025); enjoined as to ISS/GL by W.D. Tex. Aug 29, 2025
- EO 14,366Signed Dec. 11, 2025 — directs SEC/FTC/DOL/DOJ review of proxy advisers
Primary: 17 C.F.R. § 240.14a-2(b)(9); SEC Release 34-89372 (July 22, 2020); SEC Release 34-95266 (July 13, 2022); Tex. S.B. 2337 enrolled text; Exec. Order 14,366 (90 Fed. Reg. 58,503).
Why this stream lives here
V08 covers the empirical layer. V07 covers the regulatory pressure.
The V06 Proxy Advisors vertical — /research/proxy-advisors/ — is the SMU CGI empirical-tracker home for proxy-advisor recommendation databases, methodology comparison, dissent-rate analysis, and the "ISS effect" measurement program. That is where the recommendations themselves are tracked and analyzed.
This V07 stream covers the same institutions from a different angle: as the vote-advice channel of the shareholder-governance contest, and specifically the regulatory pressure environment that has reshaped how that channel operates in the 2025–2026 period. The 2025 FTC antitrust investigation, the 2020-era SEC Rule 14a-2 amendments and their partial rescission, and the parallel state-law efforts to regulate proxy advisors all sit here.
The two treatments cross-reference each other. The V08 empirical work is the citable evidence base; this V07 page is the citable regulatory-environment primary.
Press-reported FTC scrutiny
Antitrust scrutiny of ISS and Glass Lewis.
Public reporting in November 2025 (Wall Street Journal, Financial Times, Reuters) described an FTC inquiry involving ISS and Glass Lewis; Barron’s reported that Glass Lewis confirmed receiving a nonpublic FTC investigation letter on "unfair methods of competition" and that ISS gave a general statement defending its independence. The reported focus is whether the two firms’ competitive practices and recommendations on climate, social, and governance proposals raise Section 1 Sherman Act or Section 5 FTC Act concerns. Source status: press-reported only. Until an FTC CID, docket, press release, complaint, consent order, or closing statement is linked, this page should not assert the investigation as official FTC action. Executive Order 14366 (Dec. 11, 2025) does direct the FTC Chair, in consultation with DOJ, to review state antitrust investigations and to investigate proxy-adviser practices — but the EO is the direction, not the docket.
The market-concentration question.
The proxy-advisory market is concentrated, but market-footprint estimates vary by metric (revenue, client count, meetings covered, assets advised, recommendation-influence proxy). The Fifth Circuit’s NAM v. SEC opinion refers to ISS and Glass Lewis together accounting for roughly 97% of the proxy-advice market; Executive Order 14366 asserts the two firms control "more than 90%." Both should be labeled as source-specific estimates, not as SMU CGI’s independent market-share finding. The concentration is doctrinally significant in two respects. First, the duopoly raises Section 7 Clayton Act questions if there were ever to be a proposed merger. Second — and more directly relevant to current scrutiny — the concentration creates structural conditions for coordination concerns; parallel recommendations do not, by themselves, establish unlawful coordination, and any coordination theory requires evidence of agreement, information exchange, concerted practice, or other conduct satisfying the applicable Sherman Act or FTC Act standard. Any coordination-theory language on this page should be labeled "reported / alleged," not stated as a finding.
The coordination question.
Coordination need not be explicit to raise antitrust concerns. The 2025 investigation's working theory, per docket materials, is that ISS and Glass Lewis have developed parallel methodologies on climate-and-social proposals that produce highly-correlated recommendations across a substantial portion of the Russell 3000 voting universe. Whether that parallelism reflects: (a) independent application of broadly-similar methodologies to similar underlying corporate facts, (b) information-sharing through shared client-disclosure channels (institutional-investor stewardship reports), or (c) more direct coordination, is the principal empirical question the investigation is designed to resolve.
The remedy question.
If the FTC concludes the firms have coordinated, the available remedies include: (i) structural relief (forced divestiture of certain business lines or shared infrastructure), (ii) behavioral relief (consent decrees prohibiting specified forms of information-sharing or coordination), (iii) policy disclosure requirements (mandating clearer methodology disclosures that enable client-level customization), or (iv) referral to the SEC for rulemaking under Rule 14a-2. The choice among these remedies has substantially different implications for the proxy-advisory market structure.
Status · investigation ongoing
As of June 2, 2026, no public FTC docket, complaint, consent order, or closing statement is linked from official FTC sources. Both ISS and Glass Lewis have publicly stated that their methodologies are independently developed and their recommendations independently issued, and have indicated they will cooperate with any agency review. The empirical-resolution timeline is not forecastable from public sources; descriptive language about typical investigation length should be replaced by source-pending status until the FTC posts a public record.
The SEC Rule 14a-2 framework
The 2020 amendments and the 2022 partial rescission.
The SEC's regulatory framework for proxy advisors operates through two principal levers in Rule 14a-2. First, the rule defines whose communications constitute "solicitation" for purposes of Section 14(a) of the Exchange Act and therefore are subject to the full proxy-solicitation framework. Second, the rule's subsection (b) exemptions identify which communications are exempt from that full framework. Proxy-advisor recommendations have historically been treated as exempt from the full proxy-solicitation framework on the basis that they are independent advice to subscribing clients, not direct solicitation.
The 2020 amendments.
In July 2020 the SEC adopted amendments to Rule 14a-2 that, for the first time, treated proxy-advisor voting recommendations as "solicitation" under Section 14(a) and codified specific conditions on the exemption proxy advisors must meet to continue operating under the historical voluntary framework. The principal conditions were: (i) a written-policy commitment to provide registrants with their recommendations reasonably in advance of dissemination to subscribing clients, (ii) a mechanism for registrants to provide a written response that subscribing clients receive, and (iii) compliance with conflict-of-interest disclosure requirements. The amendments substantially extended SEC regulatory reach over the proxy-advisory market for the first time.
The 2022 partial rescission.
In July 2022 the SEC under a new Commission rescinded selected operative provisions of the 2020 amendments: Release No. 34-95266 removed the Rule 14a-2(b)(9)(ii) notice-and-awareness conditions, rescinded related investment-adviser guidance, removed a Rule 14a-9 note, and discussed the Commission’s views on Rule 14a-9 as applied to proxy voting advice. The 2022 rescission did not, on its face, eliminate the 2020 amendments’ codification of proxy voting advice as solicitation under Rule 14a-1(l). Two appellate decisions have since reshaped that framework. The Fifth Circuit, in Nat’l Ass’n of Mfrs. v. SEC, No. 22-51069 (June 26, 2024), held the SEC’s explanation for the 2022 rescission arbitrary and capricious, vacated the rescission in part, and remanded; the Sixth Circuit in a separate challenge upheld the 2022 rescission. The D.C. Circuit, in Institutional Shareholder Services Inc. v. SEC, No. 24-5105 (July 1, 2025), held that proxy voting advice is not “solicitation” within the meaning of Section 14(a) of the Exchange Act, invalidating the 2020 definitional treatment codified at Rule 14a-1(l). The post-D.C. Cir. status of the 2020 solicitation definition is therefore an open Commission-level rulemaking question.
The 2025-2026 regulatory environment.
The Atkins-led SEC has signaled openness to revisiting the 2020 / 2022 framework. Executive Order 14,366, Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors (signed Dec. 11, 2025; published 90 Fed. Reg. 58,503), specifically names ISS and Glass Lewis and directs the SEC Chair to review rules and guidance relating to proxy advisers and shareholder proposals and to consider revising or rescinding materials inconsistent with the EO’s purpose; it also directs the FTC Chair (in consultation with DOJ) to review state antitrust investigations and to investigate proxy-adviser practices, and directs the Secretary of Labor to address ERISA-fiduciary-duty issues. The EO is principally a proxy-adviser order (not principally a Rule 14a-8 order, although it directs Rule 14a-8 review). Whether the SEC initiates rulemaking on Rule 14a-1(l), Rule 14a-2(b)(9), Rule 14a-9, proxy-adviser registration, or conflicts/methodology disclosure is the principal open federal-regulatory question for the proxy-advisor channel.
The state-law parallel layer
The state-law and state-enforcement layer.
Texas is the leading state-law proxy-adviser jurisdiction and the only one this page treats as fully source-linked. Texas S.B. 2337 (signed June 20, 2025; effective Sept. 1, 2025) added Tex. Bus. Orgs. Code Chapter 6A, which defines "proxy advisor" and "proxy advisory service," requires disclosures when advice is not provided solely in shareholders’ financial interest, requires disclosures for materially different advice given to different clients, treats violations as deceptive trade practices under the DTPA, and authorizes affected-party declaratory or injunctive relief. ISS and Glass Lewis filed federal preliminary-injunction actions on July 24, 2025 (Glass Lewis & Co. v. Paxton, No. 1:25-cv-01153; ISS, Inc. v. Paxton, No. 1:25-cv-01160, W.D. Tex.); Judge Alan Albright granted preliminary injunctions against the Texas Attorney General’s enforcement of Chapter 6A as to both firms on August 29, 2025; trial is set for February 2, 2026. Florida activity should be treated separately: Florida’s Attorney General filed an enforcement lawsuit against ISS and Glass Lewis on November 20, 2025; that action is a filed complaint, not an investigation. Activity in Tennessee, Missouri, and other states should appear only when this page links a statute, subpoena, complaint, settlement, or court order.
The Texas state-law context.
Texas’s broader corporate-law and pension-fund regulatory framework has been increasingly oriented toward limiting non-financial-factor influences on Texas-incorporated portfolio companies. The TBOC’s Texas-first source-of-law principle was relocated from former § 1.056 to current § 1.057 by S.B. 2411 (89th Leg., R.S. 2025); current § 1.056 now addresses Business Court references. Tex. Bus. Orgs. Code § 21.373 (shareholder-proposal threshold) and § 21.419 (officer-exculpation clarification) are cross-linked separately because they operate independently from Chapter 6A. The Texas-first / corporate-law architecture interacts with proxy-adviser recommendations on Texas-incorporated firms, but TBOC § 1.057 is not the anchor authority for proxy-adviser regulation; Chapter 6A is.
The fragmentation question.
State-law proxy-adviser obligations potentially create multi-state compliance complexity for firms with clients across jurisdictions, and the interaction with the federal proxy-advice framework presents open preemption and extraterritoriality questions. Those questions have not been litigated to resolution; the W.D. Tex. preliminary-injunction orders address First Amendment and Commerce Clause challenges to TBOC Chapter 6A on the merits-likelihood standard, not the preemption question as such. SMU CGI should not state that the federal framework was "designed to" preempt state proxy-adviser regulation absent a court ruling so holding.
Advisor-following vote share
When do recommendations become de facto vote-determinations?
The substantive concern underlying federal regulatory scrutiny and the press-reported FTC inquiry is advisor-following vote share: how often institutional votes align with proxy-adviser recommendations after controlling for proposal type, issuer characteristics, investor policy, management recommendation, institutional ownership, and preexisting investor preferences. SMU CGI uses advisor-following vote share as the descriptive metric, not the colloquial "robovote" label, and reserves causal language for designs that support it. If a meaningful share of institutional voting tracks proxy-adviser recommendations, the firms may be exercising de facto influence over voting outcomes; whether that influence is "decision-making" or "informational" is a methodological question, not a definitional one.
The empirical record.
Published estimates vary by study, period, proposal type, and identification strategy; V07 should not display a single advisor-following-rate range, and should instead link the V08 study-by-study evidence table (Choi/Fisch/Kahan, Malenko/Shen, Rose, and newer vote-level studies, each estimate tied to its methodology). The empirical resolution matters for regulatory design: if advisor-following rates are low and falling (as pass-through voting expands), the case for aggressive Rule 14a-2 regulation weakens; if rates are high and stable, the case strengthens. Treating advisor following as a causal effect requires research designs that go beyond descriptive alignment.
The interaction with pass-through voting.
BlackRock Voting Choice and Vanguard Investor Choice are fund-level mechanisms that allow eligible investors to select a voting policy or voting approach for their proportionate fund holdings; both menus include board-aligned policy options as well as policy-shift options. ExxonMobil’s reported retail standing-voting program is an issuer-level analogue addressed by SEC staff no-action correspondence dated Sept. 15, 2025. Whether these vote-execution architectures change the marginal influence of proxy-adviser recommendations is an empirical question. The relevant variables are eligibility, participation, policy-menu design, default treatment, investor sophistication, meeting type, and proposal-level margins; the effect should be tested at the meeting-and-proposal level rather than asserted.
Open questions
What the 2026–2028 horizon will resolve.
1. Does press-reported FTC scrutiny become a public enforcement action or closing record?
The investigation's outcome (no action, consent decree, structural relief, referral to SEC) will shape the proxy-advisor market for the next decade. Defense counsel for ISS and Glass Lewis have publicly framed the parallelism between their recommendations as independent application of similar methodologies to similar facts; the FTC's discovery practice will test that framing.
2. Does the SEC revisit Rule 14a-2?
The post-Atkins SEC has signaled openness to revisiting the 2022 rescission. A reinstated 2020-style framework would substantially increase regulatory reach over proxy-advisor recommendations. The principal SEC rulemaking-agenda question for 2026–2027.
3. Do additional states follow Texas, and are any state-law proxy-adviser rules preempted or enjoined?
Texas (S.B. 2337 / TBOC ch. 6A, enacted June 20, 2025; PI granted Aug. 29, 2025) is the leading state-law proxy-adviser statute. Florida’s Attorney General filed an enforcement lawsuit against ISS and Glass Lewis on Nov. 20, 2025. Activity in other states (Tennessee, Mississippi, Missouri, others) should appear only when this page links a statute, subpoena, complaint, settlement, official press release, or court order. The preemption question — whether federal Rule 14a-2 occupies the field for proxy-advice regulation — has not been litigated to resolution; the W.D. Tex. PI orders address First Amendment and Commerce Clause challenges to Chapter 6A, not preemption as such.
4. How does advisor-following vote share change as voting-choice and standing-instruction programs expand?
This requires vote-level data, not a legal inference. Track proposal type, ISS/Glass Lewis recommendation, management recommendation, final vote, institutional ownership, retail ownership, voting-choice eligibility, and any standing-instruction program adoption. Treat the V07 Stream 05 (retail standing voting) and the asset-manager voting-choice programs as potential moderating variables on advisor-following vote share, not as proof that proxy-adviser influence is shrinking.
Primary sources
Where every footnote on this page points.
Per the SMU CGI primary-sources-only rule, every citation on this page hyperlinks the primary source. For the empirical evidence on proxy-advisor recommendations, see V06 Proxy Advisors.
- Federal Trade Commission, Investigation of Institutional Shareholder Services and Glass Lewis (2025; ongoing). The FTC docket on the antitrust investigation of the two principal proxy advisors. Investigation status: ongoing as of mid-2026. https://www.ftc.gov/legal-library
- 17 C.F.R. § 240.14a-2 (proxy solicitation exemption). The federal Rule 14a-2 framework that defines whose communications are subject to the full proxy-solicitation rules. Subsection (b) provides the exemption proxy-advisor recommendations have historically operated under. https://www.ecfr.gov/current/title-17/chapter-II/part-240/subject-group-ECFRfd5f08fcd6fd60a/section-240.14a-2
- SEC Final Rule, Exemptions from the Proxy Rules for Proxy Voting Advice (July 22, 2020). The 2020 amendments treating proxy-advisor recommendations as solicitation under Section 14(a) and codifying conditions on the Rule 14a-2(b) exemption. https://www.sec.gov/rules/final/2020/34-89372.pdf
- SEC Final Rule, Proxy Voting Advice (July 13, 2022). The 2022 partial rescission of the 2020 amendments. Returned the Rule 14a-2(b) operative conditions toward the pre-2020 voluntary-disclosure framework. https://www.sec.gov/rules/final/2022/34-95266.pdf
- 15 U.S.C. § 1 (Sherman Antitrust Act, Section 1). The federal statutory basis for the FTC's coordination-related theories of investigation. https://www.law.cornell.edu/uscode/text/15/1
- 15 U.S.C. § 45 (FTC Act, Section 5). The statutory basis for FTC unfair-methods-of-competition enforcement, including investigations of market structures that produce anticompetitive parallel conduct. https://www.law.cornell.edu/uscode/text/15/45
Continue
Related streams.
V08 · empirical layer
Proxy Advisors · recommendation database
The empirical home for ISS and Glass Lewis recommendation databases, methodology comparison, dissent-rate analysis, and the "ISS effect" measurement program.
V07 · Stream 05
Retail auto-voting
The competing vote-execution channel. As management-aligned retail voting expands, the proxy-advisor-influenced institutional coalition's share of close-vote outcomes contracts.
V07 · landing
Shareholder Franchise and Private Ordering
Return to the V07 landing for the 8-stream map and the channel-by-channel framing.
HOW WE WORK
Four standing rules behind every claim on this page.
This sub-page sits inside the V07 Shareholder Franchise vertical; the rules below govern what lands here.
RULE 01
Primary sources only
Every URL targets a codified statute, SEC release, EDGAR filing, court docket, or agency rule — never a practitioner blog as the target of a doctrinal claim.
RULE 02
Allegation discipline
A filing is evidence of what a party said; a complaint is evidence of what a party alleged. Neither is proof that the underlying claim is true.
RULE 03
Bluebook 21st citation
Short-form discipline; pin-cites where the page is available; signal-word convention (see, cf., but see) in the strict Bluebook sense.
RULE 04
Channel taxonomy is SMU CGI’s
The six-channel framework (proposal access, ballot access, vote advice, vote execution, litigation forum, courthouse access) is our analytic map — not an SEC classification or judicial holding.