SEC Staff Suspends Indefinitely Shareholder Proposal No-action Process

The SEC’s Division of Corporation Finance has announced that it is withdrawing indefinitely from its historical role as the arbiter of disputes between reporting companies and shareholder proponents regarding whether companies may exclude from their proxy materials shareholder proposals submitted under Exchange Act Rule 14a-8.

On August 14, the Division issued a statement announcing that, “effective immediately” and “unless and until the Division announces otherwise,” it will no longer respond to no-action requests for, or express its views on, companies’ intended reliance on any procedural or substantive basis under Rule 14a-8 for their exclusion determinations. The new action expands the suspension of the Division’s role reviewing those determinations that was in effect during the last proxy season.

The Division’s new statement is available here.

New Division policy

In its statement, the Division underscores that it “has determined to discontinue responding to Rule 14a-8 no-action requests entirely.”

The Division’s new policy differs in two notable respects from the policy in effect for the 2025-2026 proxy season, which we discussed in the SEC Update we issued on November 24, 2025.

• No exception for exclusion determinations under Rule 14a-8(i)(1): The Division’s new policy encompasses no-action requests for exclusion of proposals on any procedural or substantive basis under Rule 14a-8. Unlike the prior policy, the new one does not except from the staff’s no-review position requests submitted under Rule 14a-8(i)(1) seeking exclusion of proposals on the basis that they are not a “proper subject” for shareholder action because they are not permissible under state law. The Division thus will cease performing a substantive review of exclusion determinations based on Rule 14a-8(i)(1).
• No staff “non-objection” response to Rule 14a-8(j) notices: Under Rule 14a-8(j), companies that intend to exclude shareholder proposals from their proxy materials must provide notice of their intention to the staff and proponents no later than 80 calendar days before the filing date for their definitive proxy materials. In a change from its prior policy, the Division will no longer respond to any such notice—formerly provided if requested by the company—with a letter indicating that, based solely on the unqualified representation in the notice that the company had a reasonable basis under Rule 14a-8 to exclude the proposal, the Division would not object if the company omitted the proposal from its proxy materials.

The staff indicates that the SEC’s Division of Investment Management, which is responsible for reviewing Rule 14a-8 no-action requests relating to investment companies, “will take a substantially similar approach” to the policy announced for operating companies subject to regulation by the Division of Corporation Finance.

Shareholder proposal process under new policy

With the two changes noted above, the shareholder proposal process in upcoming proxy seasons should be conducted under the new policy in the same manner as during the 2025-2026 proxy season.

Now that the Division has extended its no-review policy to exclusion determinations under Rule 14a-8(i)(1), companies will have to determine on their own, without staff concurrence, whether there is a “reasonable basis” to exclude proposals because they are not a proper subject for shareholder action under state law, as well as because proposals are excludible under Rule 14a-8 on other substantive bases or because of procedural deficiencies. In its statement, the Division notes that it did not receive any no-action requests to exclude a proposal based on Rule 14a-8(i)(1) during the last proxy season.

The Rule 14a-8(j) notice process will continue in effect, although the staff now will not issue any response to the notices, whether at the company’s request or otherwise. The Division directs companies to file the notices using the Division’s online Shareholder Proposal Form, which was the portal used for these submissions during the prior proxy season.

In its statement, which echoes the caution it expressed in last year’s announcement of the initial no-review policy, the Division reminds companies that they are required to file a notice under Rule 14a-8(j) if they decide to exclude a proposal. Under the rule, the notice must explain the reasons for the exclusion and, if possible, refer to the most recent applicable authority for the determination, such as Division letters. If the basis for exclusion relates to a matter of state or foreign law, the notice should include a supporting opinion of counsel. When posted to the SEC’s website, the notices will provide insight into evolving company perspectives regarding exclusion determinations.

As a number of companies discovered during the 2025-2026 proxy season, exclusion determinations without the staff’s concurrence have raised the stakes in evaluating the eligibility of shareholder proposals. Some exclusions were met with a range of adverse actions from proponents, including threatened or actual lawsuits seeking an order compelling inclusion of the proposal in the company’s proxy materials or enjoining the shareholders' meeting. In these circumstances, companies should carefully consider the potential negative consequences of excluding a proposal, particularly where the existing authorities provide reasonable arguments both for and against exclusion.