S.B. No. 2337 establishes new regulations for proxy advisory services in Texas, emphasizing the need for transparency and accountability in the recommendations made by proxy advisors. The bill mandates that proxy advisors disclose when their services are not provided solely in the financial interest of shareholders, particularly when their advice is influenced by nonfinancial factors such as environmental, social, or governance (ESG) criteria. It requires proxy advisors to provide clear disclosures to shareholders about the basis of their recommendations, especially when these recommendations conflict with the interests of the company's board of directors or involve nonfinancial considerations.

Additionally, the bill introduces a framework for enforcement, categorizing violations of these regulations as deceptive trade practices, which allows affected parties to seek legal remedies. It also stipulates that proxy advisors must notify relevant parties, including shareholders and the companies involved, when they provide conflicting advice. The law will take effect on July 1, 2025, contingent upon receiving a two-thirds vote from both houses of the legislature, or on September 1, 2025, if that vote is not achieved.

Statutes affected:
Introduced: ()
Senate Committee Report: ()
Engrossed: ()
House Committee Report: ()
Enrolled: ()