SEC's Shareholder Proposal Change May Muddle 2020 Proxies

Law360 (September 13, 2019, 3:05 PM EDT) -- On Sept. 6, the U.S. Securities and Exchange Commission staff announced a significant policy change to its administration of the shareholder proposal rule, Rule 14a-8 under the Securities Exchange Act of 1934.

When a company seeks to exclude a shareholder proposal by submitting a no-action request relying on one of the grounds for exclusion outlined in the rule, the staff will continue with its practice of reviewing the request. However, under the new policy, instead of responding in writing that it effectively agrees or disagrees with the company’s rationale, in some cases the staff may respond only orally.

The staff may...

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