NEW YORK (Reuters) - Institutional Shareholder Services (ISS) on Tuesday urged Rio Tinto shareholders to approve a proposal to review the miner's dual-listed structure amid pressure from activist Palliser Capital.

Palliser has pushed Rio Tinto, which has a primary listing in London and a secondary listing in Sydney, to unify the two into a single holding company in Australia, arguing the dual-listed structure has cost shareholders billions of dollars in value and is a reason why its stock is trading at a discount to its peers.

ISS, a prominent proxy advisory firm, is now recommending that shareholders vote on April 3 to back Palliser's non-binding resolution for the company to review the matter.

"Unification appears to bring several benefits, like reduced complexity and lower chance of conflict of interest, strategic flexibility and, for Plc shareholders, a closing of the valuation discount of their shares," the ISS report which was seen by Reuters said.

The ISS report comes days after Glass Lewis, a smaller proxy advisory firm, also recommended that shareholders endorse Palliser's proposal.

ISS and Glass Lewis recommendations can be influential in guiding how investors vote on hot button issues like who serves on boards and whether or not proposed mergers should go ahead.