(a) A proxy advisory firm shall not provide proxy voting advice to a pension plan if an actual or potential conflict of interest exists that could reasonably be expected to affect the objectivity or reliability of the proxy voting advice. As used in this subsection (a), “an actual or potential conflict of interest” includes the following acts by a proxy advisory firm or any of its affiliates:(1) Receiving or seeking to receive fees for consulting services from the issuer of the shares or any of its affiliates that are the subject of any proxy voting advice, written report, research, analysis, rating, or recommendation furnished by the proxy advisory firm;(2) Receiving or seeking to receive fees for consulting services from the sponsor of a shareholder-sponsored proposal or any of its affiliates that is the subject of the proxy voting advice; or(3) Being a member of an organization that actively supports a shareholder-sponsored proposal that is, or that is substantially similar to, the subject of the proxy voting advice.
(1) Receiving or seeking to receive fees for consulting services from the issuer of the shares or any of its affiliates that are the subject of any proxy voting advice, written report, research, analysis, rating, or recommendation furnished by the proxy advisory firm;
(2) Receiving or seeking to receive fees for consulting services from the sponsor of a shareholder-sponsored proposal or any of its affiliates that is the subject of the proxy voting advice; or
(3) Being a member of an organization that actively supports a shareholder-sponsored proposal that is, or that is substantially similar to, the subject of the proxy voting advice.
(b) A proxy advisory firm that provides proxy voting advice to a pension plan must provide a financial analysis supporting every recommendation that the proxy advisory firm makes to the pension plan on a shareholder proposal that differs from the company management's recommendation.
(c) A proxy advisory firm shall not provide proxy voting advice to a pension plan if its negative voting recommendation is based, in whole or in part, on the level of shareholder support received with respect to a previous proposal submitted to a vote at the company; provided, that the company's previous proposal was approved by the shareholders in accordance with the laws of the state of incorporation of the applicable company.
(d) This section does not apply to fiduciaries, asset managers, custodians, consultants, or other service providers that are not proxy advisory firms.