SEC Adopts Mandatory Proxy Access for Shareholders

By a 3-2 vote on Aug. 25, 2010, the Securities and Exchange Commission (SEC) approved new rules ( Release Nos. 33-9136; 34-62764; IC-29384; File No. S7-10-09) adopting proxy access. The rules will significantly change the director nomination process for public companies, and give certain shareholders access to public company proxy materials in order to solicit votes for director candidates nominated by those shareholders.

The application date of the new rules will depend on when a company last mailed its annual meeting proxy statement; but in general, the new rules will not apply to upcoming annual meetings unless the company mailed its last annual meeting proxy statement after late February 2010. Smaller reporting companies will have three years before proxy access rules will apply.