SEC Staff Suspends Indefinitely Shareholder Proposal No-action Process

The SEC’s Division of Corporation Finance has announced that it is withdrawing indefinitely from its historical role as the arbiter of disputes between reporting companies and shareholder proponents regarding whether companies may exclude from their proxy materials shareholder proposals submitted under Exchange Act Rule 14a-8.

On August 14, the Division issued a statement announcing that, “effective immediately” and “unless and until the Division announces otherwise,” it will no longer respond to no-action requests for, or express its views on, companies’ intended reliance on any procedural or substantive basis under Rule 14a-8 for their exclusion determinations. The new action expands the suspension of the Division’s role reviewing those determinations that was in effect during the last proxy season.