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

The Securities and Exchange Commission on Sept. 16, 2026 proposed rescinding Rule 14a-8 of the Securities Exchange Act of 1934, stating the rule goes beyond the agency's statutory authority and improperly intrudes into state corporate law. In a press release, the Commission said many of the rationales used to adopt Rule 14a-8 are no longer substantiated in practice or carry less weight today, and that the rule has produced unintended effects, including suggesting federal preemption that may have discouraged states from enacting their own laws on shareholder proposals.

Chairman Paul S. Atkins framed the proposals as part of two regulatory priorities: avoiding improper intrusion into state corporate law and updating SEC rules to align with modern market practices and technology. The Commission said rescinding Rule 14a-8 would leave decisions about the role and use of shareholder proposals to state law and company governing documents rather than the federal rule.

Alongside rescission of Rule 14a-8, the SEC proposed amendments to Rule 14a-4(c) to give companies more flexibility and to increase shareholder control over proposals for which a company might seek discretionary proxy voting authority. Separately, the agency put forward a package of changes to modernize the proxy solicitation process, citing technological advancements and current shareholder communication practices.

Those proposed proxy changes would remove the requirement for companies to deliver an annual report to security holders, eliminate the delivery deadline for materials incorporated by reference into proxy statements, terminate the requirement and ability to submit Notices of Exempt Solicitation, and shorten the minimum broker search period from 20 business days to five business days. The SEC said the public comment periods for these proposing releases will remain open for 60 days after publication in the Federal Register.