SEC Stays Effectiveness of Proxy Access

On October 4, 2010, the Securities and Exchange Commission announced that it would stay the effectiveness of the new proxy access rules pending resolution of a petition filed by the U.S. Chamber of Commerce and the Business Roundtable with the U.S. Court of Appeals for the D.C. Circuit. In their petition, the U.S. Chamber of Commerce and the Business Roundtable asserted that the new rules were invalid because the SEC failed to consider their effect on efficiency, competition and capital formation and because the rules were arbitrary and capricious, went beyond SEC authority and were unconstitutional.

Rule 14a-11, which was to become effective on November 15, would have required public companies to permit any shareholder or group of shareholders owning at least 3% of a public company's voting stock for at least three years to include director nominees in company proxy materials. The SEC also announced that it would stay effectiveness of an amendment to Rule 14a-8. Rule