The Proxy Advisor Transparency Act aims to enhance consumer protection in the investment sector by imposing new disclosure requirements on proxy advisors. Under this act, proxy advisors must provide clear and conspicuous disclosures when recommending actions against company management, particularly if such recommendations are not based on a written financial analysis. This includes informing shareholders and the boards of directors of the companies involved about the nature of the recommendations and the absence of financial analysis. The act also mandates that proxy advisors publicly disclose on their websites if their recommendations against management are not supported by a financial analysis that evaluates the potential impact on shareholder value.

Additionally, the act empowers the Kansas Attorney General to investigate and enforce compliance with these new requirements, categorizing violations as deceptive and unconscionable acts under the Kansas Consumer Protection Act. The Attorney General is granted exclusive authority to bring civil actions for violations, eliminating the possibility of private lawsuits under this act. The provisions of the act are designed to ensure that investors are adequately informed and can make decisions based on comprehensive financial analyses, thereby upholding their fiduciary duties.