On September 16, 2026, the SEC issued two related proposed rulemakings: (1) a proposal to rescind Rule 14a-8 under the Securities Exchange Act of 1934, which governs when companies must include shareholder proposals in their proxy materials, and to amend Rule 14a-4(c) under the Exchange Act to expand companies’ discretionary voting authority for shareholder proposals submitted outside of the Rule 14a-8 process; and (2) proposed amendments to the federal proxy rules and forms under the Exchange Act to modernize the proxy solicitation process. The proposals, if adopted, would impact public operating companies, as well as registered investment companies and business development companies (regulated funds).
Rescission of Rule 14a-8
The SEC’s proposed rescission of Rule 14a-8 would eliminate the federal framework that currently governs which shareholder proposals companies must include in their proxy materials and would leave those determinations to state law or, where permitted by state law, a company’s governing documents. The SEC takes the position that Rule 14a-8 exceeds the agency’s statutory authority under Section 14(a) of the Exchange Act, which authorizes the SEC to regulate proxy solicitations. The SEC notes that the power to regulate the scope of matters a shareholder is permitted to present for a shareholder vote is distinct from the authority granted under Section 14(a) to regulate the manner in which the proxy solicitation is made and the information the soliciting party is required to disclose. The SEC also cites other policy reasons to rescind Rule 14a-8, independent of the SEC’s lack of statutory authority. The SEC notes that the original justifications for Rule 14a-8 have not been borne out in practice or have become less compelling over time; namely that, at the time of adoption, associated costs to include such proposals were small, many proposals had management support or received meaningful shareholder support, the volume of proposals was low, and the view that the rights of shareholders to present certain matters would be reasonably clear under state law. The SEC also notes that the rule has produced certain unintended consequences. In this regard, the SEC discusses the use of the rule to gain leverage in negotiation with management or to secure private benefits, how the rule has put the SEC in the position of being asked to resolve questions of state law, and how the federal framework has discouraged the development of state shareholder proposal regimes or private ordering in which companies establish their own standards.
The SEC makes clear that the proposed rescission, while applicable to regulated funds, would not impact statutory voting rights provided to fund shareholders under the Investment Company Act of 1940. The SEC also recognizes that regulated funds’ experience with shareholder proposals differs from that of operating companies and, accordingly, is seeking comment on whether to take a different approach for funds.
Expanded Discretionary Voting Authority under Rule 14a-4(c)
The SEC also proposed to amend Rule 14a-4(c) to provide companies with greater flexibility to exercise discretionary voting authority on shareholder proposals submitted outside the Rule 14a-8 process (i.e., shareholder proposals not included in company proxy materials). Specifically, under the proposed amendments, Rule 14a-4(c)(2) would no longer prohibit a company from exercising discretionary voting authority with respect to timely shareholder proposals submitted outside the Rule 14a-8 process, regardless of whether the shareholder proponent delivers its own proxy materials to holders of the requisite percentage of the company’s shares necessary to approve the proposal. To exercise discretionary voting authority with respect to such proposals, a company would only need to briefly describe the proposal in the proxy statement and explain how it intends to vote, cross-reference that proxy statement disclosure on the proxy card, and provide a check box on the proxy card allowing shareholders to elect to not confer such discretionary authority to the company. The SEC notes that the proposed amendments to Rule 14a-4(c) are intended to align with the proposed rescission of Rule 14a-8, as shareholders may be more likely to file their own proxy materials to solicit votes for their proposals if Rule 14a-8 is rescinded.
Modernization of Proxy Solicitation Rules
The SEC also proposed amendments to modernize certain rules related to proxy solicitations. The amendments are generally intended to update the rules to account for developments since the rules were adopted or last amended, reduce compliance burdens for companies, and reduce potential investor confusion. The proposed amendments include the following:
- Eliminating the requirement to deliver an annual report to security holders, pursuant to Rule 14a-3(b), prior to or with the proxy statement, and instead requiring that the proxy statement be preceded by the filing of the company’s Form 10-K or the filing of a Rule 14a-3(b) annual report on the SEC’s EDGAR filing system;
- Eliminating the requirement to deliver the proxy statement at least 20 business days before the meeting date if it incorporates information by reference;
- Eliminating the requirement to submit a notice of exempt solicitation pursuant to Rule 14a-6(g) for certain types of solicitations that are exempt from most of the federal proxy rules;
- Shortening the minimum “broker search” period under Rule 14a-13 from 20 business days to five business days; and
- Requiring proxy statement and information statement cover pages to include contact information for a representative who can respond to questions or comments regarding the filing.
Comments on the rule proposals must be submitted by November 20, 2026. The SEC’s press release, with links to the proposing releases and related fact sheets, is available here.
