Perhaps not too surprising given the recent speech by SEC Chairman Paul Atkins that effectively cast doubt on the viability of precatory shareholder proposals if state law dictates that result and a company obtains a legal opinion to that effect, Corp Fin issued this statement this morning saying that it won’t respond to no-action requests – at least until September 30, 2026 – unless a company is seeking relief under Rule 14a-8(i)(1)’s “not a proper subject under federal or state law.”
Here’s a summary of Corp Fin’s statement:
1. Corp Fin Won’t Respond Substantively to Most No-Action Requests: Due to resource constraints and a backlog from the government shutdown, Corp Fin won’t respond to no-action requests to exclude shareholder proposals under Rule 14a-8 except for those relying on Rule 14a-8(i)(1).
2. Companies Must Still Notify Both the SEC and Proponents If They Intend to Exclude: Technically, there is no requirement that a company submit a no-action request – or receive a favorable response from Corp Fin to such a request – before omitting a shareholder proposal from its proxy materials.Rule 14a-8(j), which is typically cited as the basis for Rule 14a-8 no-action requests, only requires that companies “file their reasons” with the SEC.
Nothing has changed in that regard so companies must still notify both the SEC and the proponent at least 80 calendar days before filing the definitive proxy statement if they plan to exclude a proposal – but this is an informational filing only and Corp Fin input is not required.
3. Corp Fin Will Respond to (i)(1) Requests: Because of evolving legal interpretations and lack of clear guidance, Corp Fin will continue reviewing and issuing views on requests to exclude proposals under Rule 14a-8(i)(1), including recent questions around precatory proposals.
4. Corp Fin Willing to Provide Acknowledgment Letters (Even Without Substantive Reviews): If a company still wants an acknowledgment letter (without substantive review) for exclusions other than (i)(1), it must submit:
- A Rule 14a-8(j) notice, and
- An unqualified representation stating the company has a reasonable basis to exclude the proposal under the Rule, prior SEC guidance, or case law.
In such cases, Corp Fin will send a non-objection letter, but it will not assess the merits of the exclusion.
5. Scope & Timing of Policy: Corp Fin’s statement covers:
- The 2025–2026 proxy season (October 1, 2025 – September 30, 2026)
- Any pending no-action requests filed before October 1, 2025 that haven’t been answered yet
Companies that have already submitted requests (not under (i)(1)) and want a Corp Fin acknowledgment letter must update their submission with the required representation, but the original date still applies for the 80-day rule.
6. Use Corp Fin’s Online Shareholder Proposal Form: All Rule 14a-8(j) notices must be submitted using the SEC’s online “Shareholder Proposal Form.” Questions should be directed to Corp Fin’s Office of Chief Counsel at shareholderproposals@sec.gov or 202-551-3500.
Investment companies must use the same process, except they should send Rule 14a-8(j) notices to the Division of Investment Management at IMshareholderproposals@sec.gov.
When deciding whether to exclude a shareholder proposal, companies should continue to analyze the strength of their Rule 14a-8 exclusion arguments as (1) responses by Corp Fin to no-action requests and Rule 14a-8(j) notices are not binding on the Commission or other Divisions and Offices and do not preclude the Commission from taking enforcement action in appropriate circumstances and (2) proponents will still have the option of suing in federal court to force a company to include a shareholder proposal.
In addition, we don’t yet know the reactions of investors and proxy advisors to the concept of Corp Fin not issuing no-action responses when companies exclude shareholder proposals, so the risk of adverse reactions by stakeholders should also be considered.
While companies will likely now have significantly greater latitude to exclude proposals, they still will need to have a reasonably plausible argument under Rule 14a-8 given all this, which means there may be some proposals that companies choose to include either because they are concerned with litigation or reputational risk or because there isn’t a reasonable basis for exclusion that can be argued.
Authored by
Broc Romanek