(Reuters) - A group of four conservative-leaning U.S. states is challenging a new rule from Wall Street's top regulator that requires certain investment funds to reveal more about how they vote on shareholder ballots, including on pay packages for top executives.
The new rule, which the U.S. Securities and Exchange Commission adopted in November, will put shareholders at increased risk of loss, encouraging political activism and raising administrative costs, according to the office of Utah's attorney general.
West Virginia, Texas and Louisiana also joined the lawsuit, which was filed on Tuesday before the 5th U.S. Circuit Court of Appeals, where a large majority of judges was appointed by Republican presidents.
The SEC declined to comment.
Republican legislators and elected officials have voiced increasing opposition in recent years to what they view as progressive activism among large Wall Street investors and attempts to enable this through regulation.
In addition to disclosures on voting on executive pay, the rule the commission adopted in November requires mutual funds, exchange-traded funds and others to produce more comprehensive and machine-readable information, which the Commission says helps analysis and comparison by investors.