SEC Proposes Rescission of Shareholder Proposal Rule and Reforms to Proxy Solicitation Process

Billy Odell Tucker-Robinson Founder & Host — Banking With Billy Network • Intelligence Network • Data Science • AI Research • World News
Published: 2026-09-30T19:20:35.270Z • Permanent link

Regulatory watchers have been on high alert for weeks as the Securities and Exchange Commission (SEC) issued a proposed rule change that would significantly impact the proxy solicitation process. The proposed rule, which was announced on January 4, 2023, would rescind Rule 14a-8, a 1992 regulation that requires companies to include shareholder proposals on their proxy ballots. The proposed rule, which is open for public comment until March 6, 2023, would also reform the proxy solicitation process, which is used to gather votes on shareholder proposals and other matters.

The proposed rule change is the result of a long-standing effort by the SEC to simplify and streamline the proxy solicitation process. According to SEC Chair Gary Gensler, the proposed rule change is intended to "reduce costs and burdens on companies and their shareholders" while also "promoting transparency and accountability." The proposed rule change would also allow companies to exclude shareholder proposals from the proxy ballot if they are deemed unnecessary or redundant.

Critics of the proposed rule change argue that it would give companies too much power to exclude shareholder proposals and undermine the ability of investors to hold companies accountable for their actions. The Securities Industry and Financial Markets Association (SIFMA) has expressed concerns that the proposed rule change would "discourage companies from engaging with their shareholders and reduce the quality of shareholder proposals." The proposed rule change has also sparked opposition from some research communities, including the CFA Institute, which has expressed concerns that it would "undermine the ability of investors to engage in meaningful dialogue with companies.

The proposed rule change would have significant implications for companies in the Global Infrastructure sector, particularly those in the energy and finance sectors. Companies such as ExxonMobil, Chevron, and BP, which are major players in the energy sector, have historically opposed shareholder proposals related to climate change and other environmental issues. The proposed rule change would give these companies even more power to exclude shareholder proposals from the proxy ballot, which could undermine efforts to hold them accountable for their actions.

The proposed rule change would also have implications for research communities and market participants. Researchers and analysts at firms such as Goldman Sachs and Morgan Stanley have long used shareholder proposals as a way to gauge the views of investors on issues such as climate change and executive compensation. The proposed rule change would give companies more power to exclude these proposals from the proxy ballot, which could limit the ability of researchers and analysts to gather data on investor views.

The proposed rule change is part of a broader trend towards deregulation in the United States. The SEC has been actively working to simplify and streamline its rules and regulations, and the proposed rule change is just one example of this effort. The SEC has also proposed changes to other rules, including the rules governing short selling and the rules governing the disclosure of cybersecurity risks. These changes are part of a broader effort to promote greater transparency and accountability in the financial markets.