Citing the impact of the U.S. government shutdown, the U.S. Securities and Exchange Commission (SEC) is taking a more “hands-off” approach to the upcoming proxy season — the regulator declared that it won’t be reviewing most companies’ decisions to exclude shareholder proposals from their proxy voting materials this year.
In a statement, the SEC said its division of corporate finance has decided that it will not respond to “no-action” requests, and won’t provide its opinion on companies’ decisions to exclude shareholder proposals — potentially allowing companies to more freely reject shareholder proposals, and leaving it up to the courts to address disputes over their inclusion.
The regulator said it reached this decision based on “resource and timing considerations following the lengthy government shutdown and the large volume of registration statements and other filings requiring prompt staff attention,” along with the extensive regulatory guidance that already exists in this area.
There’s one exception to this new approach, proposals that call for actions that aren’t binding on the company and may not be considered “proper” under state law — where, the SEC said, there is still only limited guidance.
The SEC said it continues to review requests made under that provision “until such time as it determines there is sufficient guidance available to assist companies and proponents in their decision-making process.”
For most other proposals, companies will still be expected to notify both the SEC and the proponents of shareholder proposals before filing a definitive proxy statement. However, this requirement is “informational only,” the regulator said, “there is no requirement that companies seek the staff’s views regarding their intended exclusion of a proposal, and no response from the staff is required.”
The SEC’s new approach applies to the current proxy season (Oct. 1 to Sept. 30, 2026), and to any no-action requests that it received before Oct. 1, that it has yet to answer.