The "Proxy Advisor Transparency Act" aims to enhance transparency and accountability among proxy advisors in South Carolina. The bill introduces a new Article 9 to Chapter 5, Title 39 of the South Carolina Code of Laws, which mandates that proxy advisors provide specific disclosures when making recommendations that do not rely on a written financial analysis. Key definitions are established, including terms such as "company," "proxy advisor," and "written financial analysis." The bill outlines the obligations of proxy advisors when they make recommendations against company management, requiring them to disclose whether their recommendations are based on a written financial analysis and to provide details about the analysis upon request.

Additionally, the bill stipulates that violations of this article are considered deceptive trade practices, allowing for enforcement by the Attorney General and enabling aggrieved individuals to pursue legal action against proxy advisors. The act emphasizes the importance of transparency in proxy advisory services, ensuring that shareholders and companies are adequately informed about the basis of proxy advisors' recommendations. The bill is currently under consideration in the House Committee on Labor, Commerce, and Industry and will take effect upon the Governor's approval.