Following up on last week’s blog about the stats on this: Ahead of this proxy season, Corp Fin issued this statement saying that it wouldn’t respond to no-action requests – at least until September 30, 2026 – unless a company is seeking relief under Rule 14a-8(i)(1), the “not a proper subject under federal or state law” exclusion basis for companies incorporated in Delaware. Companies are still required to notify the SEC and proponents of their intention to include under Rule 14a-8(j) – and the SEC has been posting these Rule 14a-8(j) notices on its website.
Courtesy of Cooley’s Michael Mencher and Reid Hooper, here are the stats of what the exclusion notices look like for this proxy season as of yesterday:
1. There haven’t been any 14a-8(i)(1) letters – and there have been a total of 71 Rule 14a-8(j) notifications. Note that 63 letters are those that included the representation asking for a Corp Fin response; there are eight (j) notices where the staff didn’t respond because the company didn’t request it – meaning that 88% of companies have requested a staff response so far.
2. Of these 63 Rule 14a-8(j) notifications with a staff response:
– 20 of these include basic procedural bases for exclusion
– 11 of these include (i)(10) “substantial implementation” arguments (in addition to other substantive arguments)
– 8 of these argue the (i)(11) “duplicate proposals” basis for exclusion
– Two of these argue for a (i)(2) “violation of state law” (not the Delaware law (i)(1) argument)
– 11 of the letters are based on substantive (i)(7) “ordinary business” grounds (as well as (i)(3) “false and misleading” in three cases) – and a few of these don’t include lengthy arguments for their (i)(7) exclusions (see this one for example)
– Four of these are based on (i)(3) “false and misleading” grounds: one is based on (i)(3) “false and misleading” grounds and (i)(6) “absence of power or authority” grounds; and one is based on one is based on (i)(3) “false and misleading” grounds and (i)(8) “election to office” grounds
– One of these is based on (i)(9) “counterproposals” grounds
– There is one letter with a SEC response but no incoming letter
3. Of the eight (j) notices with no response requested from the staff:
- One withdrew its notice since the proponent withdrew its proposal after the (j) notice was submitted
- Two include procedural arguments
- Four (i)(10) include “substantial implementation” arguments
- One includes (i)(12) “resubmissions” arguments
4. Note there 25 no-action responses posted that were submitted prior to the staff’s November statement where no staff response was given, with eight of those 25 letters withdrawn after the staff statement.
Authored by
Broc Romanek