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Today, the SEC's Division of Corporation Finance updated several Compliance and Disclosure Interpretations (C&DIs), including on the proxy rules and schedules. The updates revise two existing questions under Rule 14a-6 and add new questions under Rules 14a-13 and 14c-2. These C&DIs include two notable changes:
- The SEC staff will now object to "voluntary" Notices of Exempt Solicitation submitted by holders below the $5 million threshold in Rule 14a-6.
- The staff will not object to broker searches conducted fewer than 20 business days before the record date if the registrant reasonably believes proxy materials will still be timely disseminated.
Rule 14a-6
The staff is drawing a sharper line around the use of Notices of Exempt Solicitation (filed on Form PX14A6G). Revised Question 126.06 states that Rule 14a-6(g)(1) requires only those soliciting shareholders who beneficially own more than $5 million of the relevant securities to file a Notice of Exempt Solicitation, and accordingly, the staff will now object to voluntary notice filings. While voluntary Notices of Exempt Solicitation were historically tolerated, the staff has observed in recent years that many submissions come from shareholders below the $5 million threshold and appear to be used primarily for generating publicity. Because this undermines the rule's original purpose (providing transparency about exempt solicitations by large shareholders), the staff will now object to voluntary submissions. Similarly, revised Question 126.07 removes the prior reference to voluntary filings under 14a-6(g)(1).
Rule 14a-13
New Question 133.02 gives issuers more flexibility on Rule 14a-13 broker searches, which generally requires that broker searches are conducted at least 20 business days prior to the record date of the applicable meeting of shareholders. The staff will not object if the broker search is completed less than 20 business days before the record date, provided the company reasonably believes materials will still be timely disseminated and it otherwise complies with Rule 14a-13 (or the corresponding requirement for information statements under Rule 14c-7(a)(3)).
Rule 14c-2
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