{"data":{"id":"us-ky/krs-367.368","jurisdiction":"us-ky","citation":"KRS 367.368","heading":"Disclosure requirement when proxy advisory service not solely in the","body":"interest of shareholders or is materially different from advice provided to\ndifferent clients.\n(1) A proxy advisory service is not solely in the interest of shareholders of a company\nif the service:\n(a) Is wholly or partly based on, or otherwise takes into account, one (1) or more\nnonpecuniary interests or subordinates the financial interests of shareholders\nto other objectives, including sacrificing investment returns or und ertaking\nadditional investment risk to promote or further nonpecuniary interests;\n(b) Involves providing a voting recommendation with respect to a shareholder -\nsponsored proposal that:\n1. Is inconsistent with the voting recommendation of the company's board\nof directors or a board committee composed of a majority of the\ncompany's independent directors; and\n2. Does not include a written economic analysis of the financial impact on\nshareholders of the proposal; or\n(c) Advises against a company proposal to elec t a governing person unless the\nproxy advisor affirmatively states that the proxy advisory service rendered\nsuch advice solely in the interest of the shareholders of the company.\n(2) If a proxy advisor provides a proxy advisory service that is not solely i n the interest\nof shareholders as provided in subsection (1) of this section, the proxy advisor shall:\n(a) Include, in writing or by electronic means, a disclosure to each shareholder or\nentity or other person acting on behalf of a shareholder receiving th e proxy\nadvisory service that:\n1. Conspicuously states that pursuant to subsectio n (1) of this section the\nproxy advisory service is not being provided solely in the interest of\nshareholders and that the advice subordinates the financial interests of\nshareholders to other objectives, including sacrificing investment returns\nor undertak ing additional investment risk to promote one (1) or more\nnonpecuniary interests; and\n2. Explains, with particularity, the basis of the proxy advisor's advice\nconcerning each recommendation, including but not limited to the\ncompany or companies for which t he advice applies to and the\nnonpecuniary interests used in the basis of the advice; and\n(b) Immediately provide a copy of the disclosure required under paragraph (a) of\nthis subsection to the company that is subject to the proxy advisory service.\n(3) If t he proxy advisor provides materially different advice to different clients who\nhave not expressly requested proxy advisory services for a nonpecuniary interest,\nthe advisor shall:\n(a) If applicable, comply with the disclosure requirements in subsections (1 ) and\n(2) of this section; and\n(b) Notify, in writing or by electronic means, each shareholder or entity or other\nperson acting on behalf of a shareholder receiving the proxy advisory service,\nthe company that is subject to the materially different advice provided by the\nproxy advisory service, and the Attorney General, of the materially different\nadvice and disclose the advice or recommendation that is:\n1. Provided solely in the interest of shareholders; and\n2. Supported by an economic analysis performed a nd relied upon by the\nproxy advisor.","path":["KRS Chapter 367"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57178","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:03Z","sha256":"931c906da762c3440be9327f09569b3f6fc38a6cee4832f814846b36d571e3f0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-367.367","next":"us-ky/krs-367.369"},"notice":"GroundRules: Original legal text. Not legal advice."}