The U.S. Securities and Exchange Commission staff’s release of Staff Legal Bulletin No. 14I ahead of the upcoming proxy season appears to reflect several issuer-friendly modifications to the staff’s processing of no-action letters seeking exclusion of shareholder proposals under Rule 14a-8 of the Exchange Act. In particular, SLB 14I addresses the following aspects of the shareholder proposal submission process under Rule 14a-8 that could be viewed as favorable to issuers:
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Deference to issuers' analyses of significant policy issues under Rule 14a-8(i)(7)'s "ordinary business" exception
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Expansion of the "economic relevance" exception under Rule 14a-8(i)(5)
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Additional eligibility requirements for proposals "by proxy" under Rule 14a-8(b)
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Application of Rule 14a-8(d) to the use of images in shareholder proposals and supporting statements and encouraged reliance on Rule 14a-8(i)(3)’s "false and misleading" standard for exclusion
We have published a comprehensive analysis of the SEC guidance on the Stinson blog Dodd-Frank.com.
