On January 16, 2015, the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the “Staff”) announced that the Staff will express no views on no-action requests, arguing that shareholder proposals may be excluded from companies’ proxy materials in reliance on Rule 14a-8(i)(9) under the Securities Exchange Act of 1934, as amended. The Staff’s announcement followed a statement issued by SEC Chair Mary Jo White on the same day, directing the Staff to review the Rule 14a-8(i)(9) basis for exclusion and report to the Commission on its review. Chair White’s announcement came after concerns arose with respect to the proper scope and application of Rule 14a-8(i)(9) in a number of no-action requests seeking to exclude “proxy access” shareholder proposals.

Rule 14a-8(i)(9) allows a company to exclude a shareholder proposal that “directly conflicts” with a management proposal. This provision has been subject to increased interest this proxy season, as a number of companies have sought to rely on Rule 14a-8(i)(9) to exclude shareholder proposals that seek an amendment of a company’s governing documents to allow “proxy access” for shareholders. “Proxy access” refers to measures that would require a company to include shareholder-nominated candidates for the board of directors on the company’s proxy card alongside the company’s own nominees, if certain procedural requirements (e.g., notice and share ownership) are met by the nominating shareholder(s). In seeking to exclude proxy access shareholder proposals under Rule 14a-8(i)(9), companies have argued in numerous no-action requests submitted this season that a proxy access shareholder proposal “directly conflicts” with management’s own proxy access proposal.