The SEC has stayed the effectiveness of its recently announced proxy access rules as a result of a legal challenge made by two leading business organizations. It is unlikely that this challenge will be resolved in time for the 2011 proxy season. The rules would otherwise have taken effect on November 15, 2010.
The Business Roundtable and the U.S. Chamber of Commerce have filed a petition with the United States Court of Appeals for the D.C. Circuit seeking review of the proxy access rules. The SEC and the petitioners have indicated that they will seek expedited review by the Court of Appeals. SEC spokesman John Nester stated that it was "our expectation that the legal issues will be resolved by late Spring." He went on to say that the SEC "continues to believe that its rules are lawful and in the best interests of investors, and we intend to vigorously defend them in court."
The SEC's order granting the stay described in this Flash is available at http://sec.gov/rules/other/2010/33-9149.pdf. See also our discussion on shareholder proxy access dated August 27, 2010 - Flash: SEC Adopts Final Rules for Shareholder Proxy Access.
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