HB 175

 2026  26LSO-0336
                             STATE OF WYOMING
                             HOUSE BILL NO. HB0175
 Proxy Advisor Transparency Act.
 Sponsored by: Representative(s) Smith
                                     A BILL
                                       for
1 AN     ACT      relating     to     corporations,  partnerships  and
2 associations;        requiring     proxy       advisors    to     disclose     when
3 proxy        advisory   services     are        not    based    on    a    written
4 financial analysis as specified; requiring proxy advisors
5 to disclose when proxy advisory services are based on a
6 written financial analysis as specified; requiring proxy
7 advisors       to   disclose      proxy       advisory    services        on   their
8 websites as specified; authorizing the secretary of state
9 to discipline registered investment advisers for violations
10 of     the     disclosure     requirements;  providing      definitions;
11 providing legislative findings; providing for a penalty;
12 providing for a civil cause of action; making conforming
13 amendments;  providing      rulemaking  authority;      specifying
14 applicability; and providing for effective dates.
15
16 Be It Enacted by the Legislature of the State of Wyoming:
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1
2Section 1.
3
4(a)     The legislature finds that:
5
6(i)     When shareholders of business entities hire
7 professionals to provide advice in the exercise of their
8 rights as shareholders, the shareholders reasonably expect
9 those services to be performed based on a written financial
10 analysis.        The     professionals  who   deviate        from    that
11 shareholder expectation  should clearly disclose that  the
12 services       provided       were   not    provided    based     on    a   written
13 financial analysis;
14
15(ii)    There is a particular need for disclosures
16 for    proxy    voting     advice     because       proxy   voting      advice    is
17 often    provided       for    hundreds      or    thousands    of     shareholder
18 votes each year and is typically based on lengthy policies
19 that contain general statements that do not explain whether
20 or     how     any     particular  recommendation       will        maximize
21 financial returns for investors for any business entity or
22 shareholders;
23
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1(iii)       Proxy advisors may not conduct a written
2 financial     analysis  before     making     recommendations        to
3 shareholders       despite      having    proxy     voting     policies    that
4 state the purpose of the recommendation is to maximize and
5 protect shareholder value;
6
7(iv)     Requiring proxy advisors to provide clear,
8 factual disclosures when a recommendation is not based on a
9 written     financial        analysis       is     necessary     to   prevent
10 fraudulent or deceptive trade practices within this state;
11
12(v)     A business entity that is the subject of a
13 shareholder       proposal      may   have       information    relevant    to
14 whether the shareholder proposal is in the shareholders'
15 financial    interests,  including    information       regarding   the
16 costs of the proposal. Requiring proxy advisors to provide
17 notice to the shareholders would allow the shareholders to
18 help   prevent     deceptive       trade     practices      associated     with
19 proxy advisors making recommendations that are not based on
20 a written financial analysis.
21
22Section     2.    W.S.     17-33-101       through    17-33-103      are
23 created to read:
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1
2CHAPTER 33
3PROXY ADVISOR TRANSPARENCY ACT
4
517-33-101.     Short title.
6
7 This act shall be known and may be cited as the "Wyoming
8 Proxy Advisor Transparency Act."
9
1017-33-102.     Definitions.
11
12(a)   As used in this act:
13
14(i)    "Company" means a publicly-traded for-profit
15 business entity;
16
17(ii)    "Company proposal" means any proposal made
18 by a company to its shareholders that is included in the
19 company's    proxy    statement,       including   but   not   limited   to
20 director nominations or elections or any proposal relating
21 to     director       nominations        or    elections,       executive
22 compensation, corporate transactions, corporate structure,
23 auditor selection or company policy on any subject;
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1
2(iii)    "Default recommendation or policy" means a
3 system, set of rules, principles or guidelines designed to
4 assist with voting decisions on any company proposal or
5 proxy proposal;
6
7(iv)    "Proxy   advisor"    means     a    person    who,    for
8 compensation, provides a proxy advisory service;
9
10(v)     "Proxy advisory     service"       means any of       the
11 following services that are provided to any person in this
12 state or provided in connection with or in relation to a
13 company:
14
15(A)   Advice    or   recommendations      on     how    to
16 vote on any matter to be voted on by shareholders of a
17 company;
18
19(B)   Proxy    statement   research     and    analysis
20 regarding any matter to be voted on by shareholders of a
21 company;
22
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1(C)    Development  of        proxy  voting
2 recommendations or policies, including establishing default
3 recommendations or policies.
4
5(vi)     "Proxy proposal" means any proposal made by
6 a   shareholder      of    a     company   that       is   included     in     the
7 company's   proxy     statement       or   has    been     submitted     to     be
8 included in the company's proxy statement, including but
9 not limited to a proposal related to any of the subjects
10 that could be covered by a company proposal;
11
12(vii)    "Shareholder"  includes  a    shareholder,
13 member, unitholder, limited partner or other equity owner
14 of a company;
15
16(viii)       "Written     financial        analysis"       means     a
17 written document that:
18
19(A)    Analyzes       the   expected      short-term        and
20 long-term    financial  benefits    and    costs     to   the    company
21 implementing a company proposal or a proxy proposal;
22
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1(B)    Concludes what vote or course of action
2 is most likely to positively affect shareholder value; and
3
4(C)    Explains the methods and processes used
5 to prepare the written financial analysis, including the
6 experience      and     geographic        location  of    the     personnel  who
7 formed the recommendation.
8
917-33-103.       Disclosure  requirements  for  proxy
10 advisors; penalty; civil cause of action.
11
12(a)     If a proxy advisor makes a recommendation against
13 company      management       on      a    company        proposal        or        a     proxy
14 proposal       or   makes      a    default  recommendation  or        policy
15 involving       votes       against       company  management       on  company
16 proposals      or   proxy      proposals  and   the     recommendation  or
17 default recommendation or policy is not based on a written
18 financial analysis, then the proxy advisor shall provide a
19 disclosure to each shareholder, or other person acting on
20 behalf    of    a     shareholder,  receiving  the    proxy        advisory
21 service. For any proxy advisory service as defined in W.S.
22 17-33-102(a)(v)(A)  or    (B),       the    proxy      advisor    shall  also
23 provide the disclosure under this subsection to the board
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1 of directors of each company that is the subject of the
2 proxy advisory service.
3
4(b)   The disclosure required under subsection (a) of
5 this section shall be provided at the same time and in the
6 same format as the proxy advisory service and shall, in a
7 clear and conspicuous manner:
8
9(i)     Identify the proxy advisory service that is
10 being provided to the person receiving the proxy advisory
11 service;
12
13(ii)    Identify the recommendation against company
14 management on a company proposal or proxy proposal or the
15 default recommendation or        policy involving      votes against
16 company management on company proposals or proxy proposals;
17
18(iii)    State that the proxy advisor has made the
19 recommendation or default recommendation or policy without
20 doing so based on a written financial analysis that:
21
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1(A)    Analyzes        the    expected       short-term      and
2 long-term     financial        benefits      and       costs    to   the   company
3 implementing the company proposal or proxy proposal;
4
5(B)    Concludes what vote or course of action
6 is most likely to positively affect shareholder value; and
7
8(C)    Explains the methods and processes used
9 to     prepare   the     analysis,        including      the     experience      and
10 geographic        location       of       personnel        who       formed      the
11 recommendation or default recommendation or policy.
12
13(c)   Each      proxy     advisor  required       to     provide     a
14 disclosure       under    subsection        (a)    of    this     section     shall
15 publicly and in a clear and conspicuous manner disclose on
16 the home page or front page of the proxy advisor's website
17 that the proxy advisor's proxy advisory services include
18 recommendations or default recommendations or policies that
19 are    against    company      management  on    company      proposals   or
20 proxy proposals and that are not based on written financial
21 analyses that:
22
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1(i)     Analyzes        the  expected  short-term  and
2 long-term       financial  benefits       and    costs       to    the  company
3 implementing the company proposal or proxy proposal;
4
5(ii)    Concludes what vote or course of action is
6 most likely to positively affect shareholder value; and
7
8(iii)     Explains the methods and processes used to
9 prepare      the       analysis,  including  the     experience  and
10 geographic  location        of  personnel        who       formed  the
11 recommendation or default recommendation or policy.
12
13(d)     If a proxy advisor makes a recommendation against
14 company      management  on    a      company      proposal  or        a     proxy
15 proposal       or     makes     a     default       recommendation  or        policy
16 involving       votes     against  company      management  on        company
17 proposals      or     proxy     proposals  and    the       recommendation  or
18 default      recommendation  or    policy       is    based      on    a        written
19 financial analysis, then the proxy advisor shall provide a
20 disclosure to each shareholder, or other person acting on
21 behalf    of    a     shareholder,  receiving  the     proxy  advisory
22 service. For any proxy advisory service as defined in W.S.
23 17-33-102(a)(v)(A)  or     (B),    the    proxy       advisor        shall        also
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1 provide the disclosure under this subsection to the board
2 of directors of each company that is the subject of the
3 proxy advisory service.
4
5(e)   The disclosure required under subsection (d) of
6 this section shall be provided at the same time and in the
7 same format as the proxy advisory service and shall, in a
8 clear and conspicuous manner:
9
10(i)     Identify the proxy advisory service that is
11 being provided to the person receiving the proxy advisory
12 service;
13
14(ii)    Identify the recommendation against company
15 management on a company proposal or proxy proposal or the
16 default recommendation or        policy involving      votes against
17 company management on company proposals or proxy proposals;
18
19(iii)    State that the proxy advisor has made the
20 recommendation or default recommendation or policy based on
21 a written financial analysis that:
22
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1(A)   Analyzes  the    expected       short-term      and
2 long-term     financial     benefits  and    costs       to    the   company
3 implementing the company proposal or proxy proposal;
4
5(B)   Concludes what vote or course of action
6 is most likely to positively affect shareholder value; and
7
8(C)   Explains the methods and processes used
9 to     prepare   the    analysis,      including  the    experience      and
10 geographic       location        of        personnel       who       formed      the
11 recommendation or default recommendation or policy.
12
13(iv)      State that the written financial analysis
14 is available upon request.
15
16(f)   Upon    request     by    any       person    who       received    the
17 disclosure under subsection (d) of this section, a proxy
18 advisor shall make the written financial analysis available
19 in electronic form within a reasonable time.
20
21(g)   A   person    who   violates        this     section      commits   an
22 unlawful deceptive trade practice under W.S. 40-12-105.
23
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1(h)    In addition to enforcement under subsection (g)
2 of this section, a shareholder, or other person acting on
3 behalf of a shareholder, who received the proxy advisory
4 service at issue or a company that is the subject of the
5 proxy advisory service aggrieved by a violation of this
6 section may bring a civil cause of action against a proxy
7 advisor for a declaratory judgment or injunctive relief in
8 a   court     of    competent     jurisdiction.     Not     later    than   the
9 seventh day after the date on which an action is brought
10 under this subsection, the plaintiff shall provide written
11 notice       by    regular   mail    to   the     attorney       general.   The
12 attorney      general     may    intervene   in    an    action    under    this
13 subsection. Nothing in this subsection shall be construed
14 to limit any remedy available under the Wyoming Consumer
15 Protection Act in W.S. 40-12-101 through 40-12-114.
16
17Section       3.   W.S.    17-4-412(d)      by     creating     a    new
18 paragraph (xv) and 40-12-105(a) by creating a new paragraph
19 (xviii) are amended to read:
20
2117-4-412.      Denial, revocation, suspension, withdrawal,
22 restriction, condition, or limitation of registration.
23
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1(d)   A person may be disciplined under subsections (a)
2 through (c) of this section if the person:
3
4(xv)     Has violated W.S. 17-33-103.
5
640-12-105.      Unlawful practices.
7
8(a)   A person engages in a deceptive trade practice
9 unlawful under this act when, in the course of his business
10 and    in    connection       with        a   consumer     transaction,     he
11 knowingly:
12
13(xviii)    Violates W.S. 17-33-103.
14
15Section   4.    This    act   shall      apply    to   proxy   advisory
16 services provided by proxy advisors to shareholders on or
17 after July 1, 2026.
18
19Section 5.      The    secretary of state shall promulgate
20 rules as necessary to implement this act.
21
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1Section 6.
2
3(a)   Except   as       provided    in   subsection      (b)    of   this
4 section, this act is effective July 1, 2026.
5
6(b)   Sections      5    and   6    of   this   act   are      effective
7 immediately upon completion of all acts necessary for a
8 bill to become law as provided by Article 4, Section 8 of
9 the Wyoming Constitution.
10
11(END)
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