SEC Approves Universal Proxy Card Requirement

On November 17, 2021, the Securities and Exchange Commission (SEC) adopted amendments to the federal proxy rules to require the use of a universal proxy card in public solicitations involving contested director elections where a dissident shareholder seeks to solicit proxies for a slate of candidates other than the company nominees. The universal proxy rules will become effective for any shareholder meeting involving a contested election held after August 31, 2022. Registered investment companies and business development companies (BDCs) are not subject to the universal proxy rules.

The new universal proxy rules require that in a non-exempt contested director election, or “proxy fight,” proxy cards must include the names of both the company's and the dissident's duly nominated candidates for directors on the same proxy card. As a result, shareholders voting by proxy will be able to “mix and match” nominees from both parties' slates. This would allow shareholders