Securities Regulation Daily Wrap Up, VITAL BRIEFING—SEC confirms directionality of expected shareholder proposal NPRM, (Sep 1, 2026)
An otherwise obscure filing by the SEC with OIRA explicitly calls for Exchange Act Rule 14a-8 to be rescinded.
According to a recent filing by the SEC with the Office of Information and Regulatory Affairs (OIRA), the Commission intends to pursue rulemaking focused on the “Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals…” Several speeches by SEC Chair Paul S. Atkins over two years and multiple sets of agency guidance during that same period of time effectively foreshadowed that possibility.
Although the details of the repeal and of other proxy process amendments to be proposed (possibly at the same time) remain unclear, the current Commission, shareholders, and public companies will look upon an eventual repeal of Rule 14a-8 through different lenses. Shareholders may look upon such development as the loss of one of the stars in the constellation of shareholder democracy. By contrast, the current Commission and perhaps some companies will see it as an efficiency gain because staff can be reoriented to other tasks and that not much would be lost because many precatory shareholder proposals were in recent years dominated by just two or three individuals with mixed results.
The road to rescission. The SEC has over the course of both Trump Administrations sought to roll back some of the options for shareholders of public companies to hold those companies accountable via the proxy process. During the first Trump Administration, the SEC amended Exchange Act Rule 14a-8 to increase the thresholds for shareholders to submit precatory proposals to companies.
During the Second Trump Administration, the SEC has issued multiple rounds of guidance that gradually removed the agency’s staff as the arbiters of questions about whether companies can exclude shareholder proposals. As a result, during the last proxy season, the SEC said it would no longer review company no-action requests to exclude most shareholder proposals, except for those asserting state law as the basis for exclusion. In advance of the upcoming proxy season, the SEC has retreated from even the review of requests to exclude based on state law.
To this end, the SEC’s Division of Corporation Finance (CorpFin) recently announced that it will put even more of the decision making over the excludability of shareholder proposals into the hands of public companies while only requiring companies to make some minimal filings with the agency that cannot be avoided via the issuance of mere guidance. The Division of Investment Management, which handles similar no-action letter requests regarding investment companies, will follow a substantially similar approach to that of CorpFin.
Given the time frame to complete an SEC rulemaking, it is possible that much of the upcoming proxy season would be unaffected by a future rescission of Rule 14a-8. The SEC has said it may issue a proposal to rescind Rule 14a-8 in October 2026. Assuming a 60-day public comment period to be followed by some period of time for agency staff to digest those comments and craft a final version of a regulation, it could take until deep into Q1 or Q2 2027 before the Commission issues a final regulation that rescinds Rule 14a-8.
Tone from the top. In a July 2026 speech, Atkins likened the agency’s decision to retreat from issuing non-binding no-action letters on the excludability of shareholder proposals “to removing the training wheels from the shareholder proposal bicycle.” Atkins suggested that the SEC’s role is to find the proper balance between federal regulation of corporate matters and similar state laws, with the added purpose of preventing any one individual from commandeering the annual general meeting. Atkins also spoke about the results of the previous proxy season, urged companies to use tools the SEC is providing to them, and cautioned states about the “politicization” of annual general meetings.
With respect to the most recent proxy season, Atkins said that “[t]he staff’s absence this season did not create the chaos that many feared.” He added: “Markets—including the market for corporate governance—are more resilient and self-correcting than some give them credit for. The system—when left to function without regulators calling balls and strikes—functioned as it should, impelling companies and shareholders to engage with one another directly. Ultimately, this season proved both a turning point and a proof of concept.”
As for companies’ willingness to us the “tools” provided by the SEC, Atkins noted that, “[i]n this endeavor, companies have mechanisms at their disposal to help them fight for themselves—on behalf of those shareholders that represent the strong majority.” Yet Akins suggested it was incumbent upon companies to choose to use those tools. “But if companies remain lackadaisical and refuse to pick up the substantial tools that we have laid on the table to help them do so, then I do not know what more we can do to intervene in their stead in the years to come,” said Atkins.
Atkins closed his remarks on Rule 14a-8 with a cautionary note for states: “Likewise, I also call on States that are competing to become—or remain—the leading destination for corporate domestication to ensure that their corporate laws do not enable the politicization of shareholder meetings.”
By way of background on Atkins’s last point, Delaware has within the past year amended its corporation law to clarify the standards for many types of deal approvals and to limit requests for some types of corporate books and records. Meanwhile, Texas and Nevada continue to be the prime competitors to Delaware for the corporate franchise, and both states have sought to stand up specialized business courts and to enact business-friendly laws including, in Texas, a law that purports to be highly restrictive of shareholder proposals.
The approaching aftermath. Both before, and possibly in the wake of a likely repeal of the SEC’s shareholder proposal rule, shareholders and companies may turn their attention to other avenues of engagement and activism, subject to the wide array of recent SEC guidance that seeks to curb some of those engagements, and subject to whatever new and/or amended rules the agency adopts regarding proxies. The timing of a potential final SEC release repealing Rule 14a-8 may overlap with the current proxy season, which means companies will need to be alert for any guidance the SEC may issue around a potential effective date for any proxy rule amendments.
But perhaps the net result will entail a future in which larger, more sophisticated activists emphasize proxy contests and board seats. Shareholders also may seek to be more aggressive in seeking corporate books and records, although states like Delaware have recently sought to curb these requests. As for state laws on shareholder proposals, this remains an area that could be fraught because, as some commenters have noted, these laws are not only varied in their contents but some of them may raise questions about interpretation. Lastly, companies and shareholders may need to balance their interests in negotiation on corporate matters against the risks attendant with potential litigation.
A primer on the upcoming proxy season. Learn more about the changes for proxy season 2026-2027 and the potential amendments to Regulation 14A, including rules for shareholder proposals, that the Commission may consider proposing later this year in the following video and print updates:
To watch a Video Vital Briefing on the upcoming proxy season, please click here.
To read the accompanying paper “Shareholder proposals the sequel: if there is one thing to know about the current proxy season, it is this…”, please click here.
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