SEC Requests Comments on Amendments to Shareholder Proposal Rule

On July 27, 2022, the Securities and Exchange Commission (SEC) published proposed amendments to three of the substantive bases for exclusion of shareholder proposals under Exchange Act Rule 14a-8:

  • the substantial implementation exclusion;
  • the duplication exclusion; and
  • the resubmission exclusion.

In a statement released on July 13th, Chair Gary Gensler stated that the amendments “would provide greater certainty as to the circumstances in which companies are able to exclude shareholder proposals from their proxy statements.” In an Initial Regulatory Flexibility Analysis (IRFA), SEC notes that the proposed amendments will affect small entities that are either shareholder-proponents that submit Rule 14a-8 proposals or issuers subject to the federal proxy rules. SEC requests public comments on its IRFA, and specifically requests comments on the number of shareholder-proponents that may be considered small entities and how the proposed amendments would affect small entities.

The comment period closes September 12, 2022.

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