Senate committee substitute to the 1st edition makes the following changes.
Removes one of the legislative findings related to the hiring of proxy advisors by fiduciaries under the Employment Retirement Income Security Act.
Amends proposed GS 78C-110 as follows. Changes the definition of company by no longer requiring the entity to be organized under North Carolina laws, having its principal place of business in North Carolina, be a foreign entity that has made a company proposal to become a domestic entity by merger, conversion, or otherwise. No longer excludes from the term proxy advisory, an attorney or accountant. Amends the definition of proxy advisory service so that it is now any of the listed services that are in connection with a company headquartered or incorporated in North Carolina or to a person in this State by a proxy advisor. Amends the exclusions from the definition of proxy advisory service to now exclude: (1) services carried out as part of in-house securities brokerage, investment advisory, trust, or estate administrative services, or (2) a charitable organization if its gross annual revenue from proxy advisor is less than $250,000 and, if applicable, each affiliated group of the organization has combined gross annual revenue from proxy advisory services less than $250,000. Amends the definition of proxy proposal to also include a shareholder proposal that has been submitted for inclusion in the company’s proxy statement.
Amends proposed GS 78C-111 as follows. Specifies that the disclosures from the proxy advisor must be made to each shareholder or other person acting on behalf of a shareholder receiving the proxy advisory service. No longer makes a reference to the definition of written financial analysis.
Bill Summaries: S1057 REQUIRED DISCLOSURES/PROXY ADVISORY SERVICES.
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Bill S 1057 (2025-2026)Summary date: Jun 16 2026 - View Summary
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Bill S 1057 (2025-2026)Summary date: May 4 2026 - View Summary
Sets out legislative findings.
Enacts Article 10, “Proxy Advisor Transparency Act,” to GS Chapter 78C. Defines nine terms.
Requires proxy advisors making a recommendation not based on a written financial analysis against company management on a proposal to conspicuously disclose to shareholders that such recommendation is not based on a written financial analysis. Requires a proxy advisor providing advice on how to vote or analysis of a proposal to provide this disclosure to the board of directors of each company that is the subject of the service. Requires proxy advisors to publish a statement on the proxy advisor’s website that one or more recommendations against company management are not based on a written financial analysis.
Requires proxy advisors making a recommendation against company management on a proposal that is based on a written financial analysis to conspicuously disclose to shareholders that such recommendation is based on a written financial analysis that is available upon request and to make the analysis available within a reasonable time. Requires a proxy advisor providing advice on how to vote or analysis of a proposal to provide the analysis to the board of directors of each company that is the subject of the service.
Requires proxy advisors to register annually with the Secretary of State and to pay an annual fee. Provides that a violation of the Article is an unfair and deceptive trade practice actionable under GS Chapter 75 and subject to Attorney General investigation. Authorizes aggrieved persons (as defined) to seek declaratory judgment or injunctive relief against a proxy advisor and sets out notice requirements.
Contains a severability clause.
Effective October 1, 2026 and applies to proxy advisory services provided on or after that date. Provides that nothing in this act eliminates any claim under GS Chapter 75 regardless of when that claim accrues.