SEC Proposes Rescission of Shareholder Proposal Rule and Reforms to Proxy Solicitation Process

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On September 16, 2026, the U.S. Securities and Exchange Commission proposed to rescind Rule 14a-8 under the Securities Exchange Act of 1934, stating that the rule exceeds the Commission's statutory authority and intrudes into matters of state law, and that rescinding it would leave determinations about shareholder proposals to state law and company governing documents. The Commission also proposed amendments to Rule 14a-4(c) to provide companies with greater flexibility and shareholders with greater control regarding proposals for which a company may seek discretionary proxy voting authority, and separately proposed amendments to modernize the proxy solicitation process, including eliminating the requirement that companies deliver an annual report to security holders, eliminating the delivery deadline when documents are incorporated by reference into a proxy statement, eliminating the requirement and ability to submit Notices of Exempt Solicitation, and shortening the minimum broker search period from 20 business days to five business days. SEC Chairman Paul S. Atkins stated that the proposals reflect his priorities of ensuring the Commission does not improperly intrude into state corporate law and updating the Commission's rules to reflect developments in market practice, technology, and other innovations.

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