SEC Proposes Rules Rescinding Federal Regulation Of Shareholder Proposals And Modernizing Proxy Solicitations

On September 16, 2026, the Securities and Exchange Commission (the “Commission”) proposed two sets of amendments to the federal proxy rules under Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The first proposal would rescind Exchange Act Rule 14a-8, the shareholder proposal rule, and amend Exchange Act Rule 14a-4(c) to broaden the circumstances in which issuers may exercise discretionary proxy voting authority. The second proposal would modernize several proxy solicitation rules to account for technological developments and reduce compliance burdens for issuers and large shareholders.

Rule 14a-8 addresses when issuers must include shareholder proposals in the proxy materials for their annual or special shareholder meetings. The proposing release discusses the scope of the Commission’s authority under Section 14(a) of the Exchange Act and explains the Commission’s view that the rule should be rescinded because it exceeds its statutory authority, as it places the Commission in the position of making judgments about the application of state law that are best left to other actors and has had the unintended consequence of inhibiting the development of state law and private ordering. If rescinded, determinations about the role of shareholder proposals would be left to state law and issuer governing documents (if permitted by state law).

Alongside the proposed rescission, the Commission proposed amendments to Rule 14a-4(c), which prohibits issuers from voting proxies on shareholder proposals submitted outside of Rule 14a-8 that will be presented at a shareholder meeting but are not included in an issuer’s proxy materials. The Commission stated that an unintended consequence of this prohibition is that issuers may feel compelled to include proposals submitted outside of Rule 14a-8 on their proxy cards, even though neither the federal proxy rules nor existing state law requires their inclusion, to avoid the prohibitions on discretionary voting mandated by Rule 14a-4(c). The proposed amendments would provide issuers with greater flexibility to seek and obtain discretionary voting authority regarding such shareholder proposals, the submission of which may become more frequent if Rule 14a-8 is rescinded. At the same time, the proposed amendments would provide shareholders with the ability to elect to prevent an issuer from exercising such authority with respect to their individual shares.

In a separate proposing release, the Commission proposed a series of modernization amendments to the proxy solicitation rules, many of which have not been revisited in decades since their respective adoptions or last amendments. The modernization proposal would, among other amendments:

• eliminate the requirement to deliver annual reports to security holders (“ARS”) for issuers that have a Form 10-K already on file for their most recent fiscal year, given the overlap of the disclosure requirements of the ARS and Form 10-K, and the ease of accessing an issuer’s Form 10-K on EDGAR;
• eliminate the requirement that issuers send proxy statements at least twenty (20) business days before a shareholder meeting when information is incorporated by reference, recognizing that the filings incorporated by reference are now more easily accessible to investors via EDGAR;
• rescind Rule 14a-6(g), which requires large shareholders to submit a Notice of Exempt Solicitation on EDGAR for certain written exempt solicitations, to eliminate both mandatory and voluntary Notices of Exempt Solicitations. The voluntary filing of such Notices had become increasingly prevalent, a development the Commission Staff attempted to curtail with the publication of Proxy Rules and Schedules 14A/14C Corporation Finance Interpretation (“CFI”) 126.06 (read about it here). Today’s proposed change is intended to build on the CFI, reducing investor confusion caused by the substantial number of voluntary filings not contemplated by the rule, and reducing compliance burdens for large shareholders that are currently required to submit such Notices;
• shorten the minimum broker search period from twenty (20) business days to five (5) business days to reflect the more efficient coordination among intermediaries brought about by the internet age (foreshadowed in recent new Proxy Rules and Schedules 14A/14C CFI 133.02, here); and
• revise the cover pages of Schedule 14A and Schedule 14C to require contact information for a representative who can respond to questions regarding the filing.

Together, these proposals represent a significant shift in the Commission’s approach to the proxy solicitation framework. The public comment periods for each will remain open for 60 days following publication. The full text of the proposed rules can be found here for the Commission’s proposed Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4 and here for the Commission’s proposed Proxy Solicitation Modernization.