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

On Sept. 16, 2026, the Securities and Exchange Commission proposed to rescind Rule 14a-8 under the Securities Exchange Act of 1934. The agency stated the rule "exceeds the scope of the Commission's statutory authority and intrudes into matters of state law."

The release cites "unintended consequences," including how federal oversight might have led jurisdictions to hesitate before crafting independent statutes for shareholder proposals. Under the proposal, state law and company governing documents would control the role of shareholder proposals.

"First, ensuring that the Commission does not improperly intrude into state corporate law when applying the federal securities laws," said SEC Chairman Paul S. Atkins in a statement. He added, "I look forward to receiving and reviewing the public’s feedback on both proposals."

Sixty days after publication in the Federal Register, the public comment periods will stay open. This confirmation appears in a second agency document detailing reforms for registered offerings.

The same release proposed amendments to modernize the proxy solicitation process. These include shortening the minimum broker search period from 20 business days to five business days, eliminating the requirement to deliver annual reports to security holders, and removing the ability to submit Notices of Exempt Solicitation. The commission also proposed amendments to Rule 14a-4(c) to provide companies with greater flexibility regarding discretionary proxy voting authority.