SEC Proposes Modernization of Proxy Solicitation Rules
What You Need To Know
- The Securities and Exchange Commission is proposing to rescind Rule 14a-8, which would eliminate shareholders’ ability under federal law to require that their proposals be included in a company’s proxy statement and instead leave it to state law and company governing documents to determine whether, and under what circumstances, shareholder proposals must be included in company proxy materials. The SEC argues that Rule 14a-8 exceeds the agency’s statutory authority and that shareholder proposals are a matter of state law. The SEC also argues that, irrespective of its legal basis, the underlying premises of the rule’s original adoption have proven to be inaccurate, and the rule should be repealed as a matter of wise policy.
- The SEC is also proposing amendments to Rule 14a-4(c) that would, if adopted, provide companies with greater flexibility to seek and obtain discretionary voting authority on certain proposals that will be presented at a shareholder meeting but are not included in the company’s proxy materials. Shareholders would be able to opt out of allowing the company to exercise such authority over their individual shares.
On September 16, 2026, the U.S. Securities and Exchange Commission (SEC) issued a proposed rule that would, if adopted, rescind Rule 14a-8 in its entirety, leaving shareholder proposals to state law and company governing documents. As part of the same release, the SEC also proposed amendments that would expand the circumstances under which a company may exercise discretionary voting authority on proposals that will be presented at a shareholder meeting but are not included in the company’s proxy materials.
In related news announced the same day, the SEC is proposing:
- The rescission of Rule 14a-8, which would eliminate shareholders’ ability under federal law to require that their proposals be included in a company’s proxy statement and instead leave it to state law and company governing documents to determine whether, and under what circumstances, shareholder proposals must be included in company proxy materials
- Amendments to Rule 14a-4(c) that would provide companies with greater flexibility to seek and obtain discretionary voting authority on certain proposals that will be presented at the meeting but are not included in the company’s proxy materials (subject to a shareholder’s right to opt-out)
Taken together, the proposed rules would implement constructive and meaningful changes to the proxy season process and allow public companies to operate on more compressed proxy timelines.
This alert summarizes the key provisions of the Proxy Solicitation Modernization proposal (Proxy Solicitation Proposal).
Elimination of Delivery of Annual Reports
Currently, Rule 14a-3(b) requires companies soliciting proxies in connection with annual meetings to furnish security holders with an annual report to security holders (ARS) containing specified financial and other information. Over time, this requirement has evolved so that most companies satisfy it by sending shareholders a Form 10-K, a “Form 10-K wrap” (the Form 10-K with additional graphical or narrative material), or directing shareholders to the EDGAR posting of the Form 10-K. The SEC estimates that approximately 90% of registrants already rely on Form 10-K or Form 10-K wrap filings to satisfy the ARS requirement.
The proposal would eliminate the current delivery requirement for ARSs. As proposed, amended Rule 14a-3 would only require that a proxy statement relating to a shareholder meeting at which directors will be elected be preceded by either (1) the filing of the registrant’s Form 10-K for the registrant’s most recent fiscal year on EDGAR, or (2) the furnishing of an annual report to security holders on EDGAR that meets the requirements set out in the rule.
The proposal would also eliminate disclosure in the ARS that goes beyond what is required in Form 10-K, including the stock performance graph required by Item 201(e) of Regulation S-K (other than for business development companies and face-amount certificate companies, which would still be required to provide the graph, but in a Form 10-K rather than an ARS). In proposing to eliminate the stock performance graph, the SEC notes that comparable information (showing a company’s cumulative total shareholder return against relevant indices) has become widely and freely accessible to investors through online sources, such as financial-data providers, investor-relations websites, and brokerage platforms, since the requirement was adopted in 1992, which, the SEC argues, has reduced the incremental value of the graph.
As a result of these changes, most companies would no longer need to comply with the separate ARS disclosure requirements in Rule 14a-3 and instead would comply by filing their standard Form 10-K. Notably, the current requirement that companies (other than registered investment companies) provide a copy of the Form 10-K, upon request, to security holders to whom a proxy statement is delivered would not be eliminated. The proposed rules would relocate this obligation, currently housed in Rule 14a-3(b)(10), to a new Note F to Schedule 14A.
The SEC estimates aggregate annual compliance cost savings of approximately $3.5 million from eliminating the ARS delivery requirement, assuming approximately 90% of registrants elect to rely on a previously filed Form 10-K.
This proposal is one of several concurrent SEC initiatives touching proxy delivery mechanics. The SEC has separately proposed a new Regulation E-Delivery that, if adopted, would permit companies to use electronic delivery as the default method for shareholder communications. The release notes that, to the extent Regulation E-Delivery is adopted as proposed and companies choose to rely on it to distribute ARSs electronically, the cost savings from printing and mailing anticipated under this proposal may be diminished for those companies with respect to ARSs. Fenwick submitted comments to the SEC on September 16, 2026, supporting the regulation’s goals and suggesting minor modifications.
Elimination of 20-Business-Day Delivery Deadline for Incorporation by Reference into the Proxy Statement
Note D.3 to Schedule 14A currently requires that any document incorporated by reference into a proxy statement be delivered to shareholders at least 20 business days before the applicable meeting. This requirement was adopted when document delivery occurred primarily through physical mail.
The proposal would eliminate this minimum delivery period in Schedule 14A and Form S-4 and Form F-4 on the basis that documents incorporated by reference are now generally available on EDGAR immediately upon filing and can be accessed by shareholders through active hyperlinks in the proxy statement. The SEC notes that registrants would no longer need to observe minimum periods that may exceed the time now required to complete the relevant processes.
Elimination of Requirement to Submit Notice of Exempt Solicitation
Rule 14a-6(g) currently requires shareholders who beneficially own more than $5 million of a class of a company’s securities to submit to the SEC a copy of any written soliciting materials used in connection with an exempt solicitation (a Notice of Exempt Solicitation). The SEC notes in the release that in practice, approximately 80% of Notice of Exempt Solicitation submissions in 2025 were made voluntarily by filers who disclosed that they beneficially owned $5 million or less.
In January 2026, the Division of Corporation Finance updated its guidance to state that staff will object to voluntary submissions of Notices of Exempt Solicitation. According to the SEC, following that guidance, approximately five voluntary notices were submitted. Several third-party platforms (including Proxy Open Exchange and the Interfaith Center on Corporate Responsibility) have emerged as alternative distribution channels for exempt solicitation materials. As noted in the release, shareholders also frequently broadcast the content of their exempt solicitations by press release or other public announcement.
The proposal would eliminate Rule 14a-6(g) in its entirety, removing the submission requirement for both mandatory and voluntary filers. The release also acknowledges that this change interacts with the SEC’s separate proposal to rescind Rule 14a-8 and amend Rule 14a-4(c), and recognizes that this other proposal could, if adopted, result in an increase or decrease in the number of exempt solicitations and thus an increase or decrease to the benefits and costs discussed in connection with the proposed amendments to Rule 14a-6.
Shortening the Minimum Broker Search Period
Under Rule 14a-13, companies must inquire of brokers, dealers, and banks holding securities in street name as to the identity of beneficial owners before distributing proxy materials. The current rules require a minimum 20-business-day period for brokers and banks to respond to such inquiries. The proposal would shorten this minimum period from 20 business days to five business days, reflecting the SEC’s view that modern electronic communications enable brokers and banks to respond significantly faster than when the 20-business-day period was established.
Notably, the proposed rules would only shorten the period within which companies must initiate the broker search under Rule 14a-13; they would not shorten the downstream response periods in Rule 14b-1 (currently seven business days for brokers and dealers) or Rule 14b-2 (currently one business day for respondent-bank identification and seven business days for beneficial owner counts). The SEC has requested comments on whether those response periods should also be shortened, but under the proposed rules, they would remain unchanged.
As noted in the proposed rule release, the shortened broker search period could affect deal and proxy contest timing as well. Companies pursuing mergers or other transactions requiring a shareholder vote, or facing a contested election, have had to build the current 20-business-day period into their record-date planning. Under the proposed rules, that period could shrink to as little as five business days, allowing companies to move toward a vote more quickly and reducing the risk that market volatility, a new bidder, or other external developments arise during the search period. The SEC acknowledges that this could leave dissident shareholders less time to build a position or organize support before the record date, but notes that the current process is non-public, so shortening it may also reduce an existing informational advantage some dissidents hold over investors—"so a cost to dissident shareholders may also represent a benefit to other market participants.”
The shorter broker search period could also affect share lending tied to voting. A narrower window could reduce opportunities for “empty voting” (voting borrowed shares without a corresponding economic interest), but the SEC notes that it could equally leave institutional holders less time to recall loaned shares in order to vote them. Companies and institutional investors may want to consider both effects if the rule is adopted.
While it remains unclear whether this shortened period will be effective for the 2027 proxy season, the SEC issued guidance earlier this year that “the staff will not object if a registrant conducts its ‘broker search’ less than 20 business days before the record date, provided that the registrant reasonably believes that its proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13.” Accordingly, companies do not have to comply with the full 20-business-day period in the upcoming proxy season.
Contact Information on Proxy Statements
The proposal would amend Schedule 14A and Schedule 14C to require companies to include contact information—name, address (physical or email), and telephone number of a representative—on the cover page of proxy statements and information statements. This new requirement is intended to facilitate more efficient communication between SEC staff and registrants in connection with staff inquiries. In a related technical amendment, the proposed rules would also revise householding notice provisions in Item 23(c) of Schedule 14A and Item 5(c) of Schedule 14C to replace “mailing address” with “address,” permitting registrants to designate an email address for shareholders to use when requesting separate delivery of materials.
Next Steps
The Proxy Solicitation Proposal is subject to a 60-day public comment period following publication in the Federal Register. The final rules could be adopted in early 2027.
While the changes contemplated by the Proxy Solicitation Proposal appear less likely to generate the same level of controversy as the SEC’s separate proposal to rescind Rule 14a-8 and amend Rule 14a-4(c), they remain subject to potential legal challenges, and any resulting litigation could delay their implementation.
At this stage, companies preparing for the 2027 proxy season should operate on the assumption that the current framework remains in place but continue to monitor developments closely and begin considering how the proposed changes would affect their proxy statement preparation and annual meeting planning if the proposal is finalized.