Wires

UPDATE 1-U.S. SEC set to vote on new regulations for proxy advisers - source

Katanga Johnson

(Changes sourcing, adds background, byline)

Oct 25 (Reuters) - The U.S. Securities and Exchange Commission (SEC) is set to vote on Nov. 5 on a proposal for setting new limits on shareholders' ability to call for change at companies, a source familiar with the matter said.

The regulator is expected to propose rules that would require proxy adviser firms to give companies two chances to review proxy materials before they are sent to shareholders, according to the source.

It will also vote to increase the re-submission thresholds for motions that shareholders file at companies on issues ranging from executive compensation to climate change disclosures.

The thresholds would rise under the new proposal, although Reuters couldn't ascertain by exactly how much.

The new regulations, if passed, would be a blow to activist groups of charged issues such as gun rights and climate change that relied on shareholder proposals for leverage.

In August, the regulatory body issued new guidelines clarifying how investors and advisory firms that cast ballots on their behalf should vote in corporate elections on issues like pay and diversity.

The guidance addressed some of the grievances U.S. corporations had about so-called proxy advisers, such as mistakes in reports the advisers issue on specific companies and conflicts of interest in their business models.

Proxy advisory firms tell investors how to vote on governance issues in corporate elections and cast ballots on behalf of some asset managers. The role of proxy advisers has gained more attention in recent years as the firms have grown more influential on charged corporate issues. (Reporting by Abhishek Manikandan in Bengaluru and Katanga Johnson in Washington; Editing by Sriraj Kalluvila and Shailesh Kuber)