On August 14, the SEC’s Division of Corporation Finance (the “Division”) issued an updated statement (the “Updated Statement”) announcing that, effective immediately, Division staff (the “Staff”) will no longer respond to no-action requests relating to the exclusion of shareholder proposals submitted under Rule 14a-8 of the Exchange Act. The Division further stated that the Staff will no longer issue “no objection” letters in response to a company’s Rule 14a-8(j) notice of exclusion containing an unqualified representation that the company has a reasonable basis to exclude a shareholder proposal from its proxy materials. Together, these actions effectively remove the Staff from any substantive role in the shareholder proposal exclusion process.
The Updated Statement expands on a prior November 17, 2025 statement in which the Division announced that the Staff would not respond to Rule 14a-8 no-action requests for the 2025-2026 proxy season, except for no-action requests seeking to exclude shareholder proposals under Rule 14a-8(i)(1). Per the Updated Statement, the Staff will no longer respond even to no-action requests submitted under Rule 14a-8(i)(1), although the impact of this shift is not expected to be significant because no companies sought no-action relief on this basis in the 2025-2026 proxy season.
The Division explained in the Updated Statement that it determined to discontinue all responses in order to focus Division resources on the review of Securities Act and Exchange Act filings, including those reviews that are statutorily required, for the protection of investors and facilitation of capital formation, and in light of the existing SEC and Staff guidance and precedent available regarding Rule 14a-8.
Importantly, companies that intend to exclude a shareholder proposal must still comply with Rule 14a-8(j) by submitting a notice to the SEC through the online Shareholder Proposal Form and to the proponent no later than 80 calendar days before filing a definitive proxy statement. The Rule 14a-8(j) notice must include an explanation of the reasons why the company believes it may exclude the proposal, referring to the most recent applicable authority, such as no-action letter precedent, where applicable. The Division also added that its shareholder proposal email address is no longer operational, and any correspondence should be submitted through the online Shareholder Proposal Form.
The Updated Statement also announced that the Division of Investment Management, which is responsible for responding to Rule 14a-8 requests related to investment companies, will similarly no longer provide substantive responses. Rule 14a-8(j) notices for investment companies will continue to be submitted to the Division of Investment Management through its existing shareholder proposal email address.
The Division’s statement represents a meaningful additional development in the shareholder proposal landscape as the Staff has now completely withdrawn itself from its historical role in the shareholder proposal process. In determining whether to exclude a shareholder proposal, companies will need to consider litigation risk (which increased following the Division’s November 17, 2025 statement) and existing no-action letter precedent and SEC and Staff guidance. Companies should also continue to be mindful of proxy advisory firm guidance when determining whether to exclude a proposal, as these firms may recommend voting against directors where a shareholder proposal is omitted without an adequate explanation for its exclusion. Further, more fundamental, changes to the shareholder proposal process are also expected, as the SEC’s “Shareholder Proposal Modernization” rulemaking remains on the SEC’s regulatory agenda.
