SEC Proposes Rules on Shareholder Proxy Access: Analysis and Commentary
June 2009
Colin J. Diamond
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On June 10, 2009, the Securities and Exchange Commission (the "SEC") published proposed amendments to its proxy rules to permit shareholders to include director nominees in a company's proxy materials. The SEC Commissioners had approved the long-awaited proposals three weeks earlier in a three-to-two vote along party lines. The 250-page proposing release reflects the significant ongoing debate over what the SEC has acknowledged is a "novel" and "significant" change in corporate governance.
The proposed rules would require companies to include in their proxy materials:
- directors nominated by certain shareholders or groups of shareholders; and
- shareholder proposals seeking to amend a company's governing documents as they relate to director nomination procedures or disclosures related to shareholder nominations.
The proposed rules would apply to all companies that are subject to US proxy solicitation rules, including registered investment companies.3 The proposed rules would not apply to foreign private issuers. Comments on the proposed rules are due before August 17, 2009. Assuming final rules are adopted, it is not clear if the final rules will be effective before the 2010 proxy season.
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