Proxy voting is how shareholders exercise their right to vote on corporate matters (like electing directors, approving executive pay, or major mergers) when they do not attend a company’s shareholder meeting in person. Investors can vote directly or give a “proxy” (authority) to someone else—often an investment manager—to vote on their behalf.
For investors, these votes influence how the companies they own are run, which can affect long‑term value and risk. For fiduciaries such as investment advisers and fund managers who have agreed to vote proxies, the SEC treats proxy voting as part of their fiduciary duty: they must vote in their clients’ best interests and have policies and procedures reasonably designed to ensure that outcome, not to pursue the adviser’s own preferences.
For investment managers (such as SEC‑registered investment advisers), being a “fiduciary” means they must act in their clients’ best interests at all times within the scope of the advisory relationship.
In practice, this fiduciary duty has two main parts:
This standard applies on an ongoing basis to how advisers manage portfolios, vote proxies, charge fees, and handle conflicts.
The SEC’s Division of Investment Management (DIM) is the unit that develops and administers the regulatory framework for the U.S. investment management industry. It has primary responsibility for the Investment Company Act of 1940 and the Investment Advisers Act of 1940, which govern mutual funds, exchange‑traded funds (ETFs), other registered investment companies, and SEC‑registered investment advisers. The Division drafts rules, reviews fund and adviser disclosure filings, issues interpretive guidance (such as no‑action letters and staff bulletins), and advises the Commission on policy affecting asset managers and funds.
The Division’s director is the senior official who leads this work. In practice, the director:
Brian Daly, who delivered these remarks, currently holds that director role.
These are specialist committees of the New York City Bar Association made up largely of lawyers who focus on particular segments of the investment industry:
Investment Management Regulation Committee: focuses on regulatory and litigation issues affecting investment advisers and pooled investment vehicles, especially mutual funds and other registered investment companies. It examines topics such as mutual fund governance, distribution of fund shares, money market fund regulation, and rules on political contributions by investment managers and their employees.
Private Investment Funds Committee: focuses on legal and regulatory issues affecting private funds, including hedge funds, private equity funds, and venture capital funds, and their sponsors. It covers areas such as the Investment Advisers Act, Investment Company Act, Commodity Exchange Act, U.S. tax law, ERISA, and relevant international, state, and local regulations, and often participates in legislative and rulemaking processes through comment letters.
Speeches and remarks by an SEC division director do not themselves create law, change rules, or formally set enforcement priorities, and they typically carry an explicit disclaimer that the views expressed are the speaker’s own and not binding on the Commission or its staff.
However, in practice, such speeches are closely watched because they often:
So these remarks can be an early indicator of regulatory direction or emphasis, but they are not a promise that specific rule changes or enforcement actions will follow.
The full text of Brian Daly’s remarks, “(Re)Empowering Fiduciaries in Proxy Voting,” is available on the SEC’s website at this page:
https://www.sec.gov/newsroom/speeches-statements/daly-remarks-nycba-proxy-010826