On September 16, 2026, the Securities and Exchange Commission issued two proposals that, if adopted, would substantially reshape the federal proxy framework. The first proposal would rescind Exchange Act Rule 14a-8 in its entirety and amend Rule 14a-4(c) to broaden the circumstances in which companies may exercise discretionary voting authority over shareholder proposals presented at a meeting but omitted from the company's proxy materials. The second proposal would modernize several proxy-solicitation requirements, including by eliminating the requirement to deliver an annual report to security holders and shortening the minimum broker search period.
Taken together, the proposals would deliver both a substantive and a procedural reset of the federal proxy framework: they would move the regulation of shareholder access to company proxy materials from a federal framework to state corporate law and would remove a plethora of requirements that the SEC now views as duplicative or anachronistic in today's market. The proposals also fit within Chair Atkins' broader "Make IPOs Great Again" agenda and follow a series of recent SEC initiatives intended to reduce compliance burdens on public companies.
Both proposals were published in the Federal Register on September 21, 2026, and comments on each are due November 20, 2026.[1]
Key Takeaways
- The end of federal right to inclusion of shareholder proposals. If the proposal is adopted, the federal proxy rules would no longer require a company to include a qualifying shareholder proposal in its proxy materials. Whether inclusion is required would instead turn on applicable state law and, where state law permits, the company's governing documents.
- Rule 14a-4(c) would give companies broader discretionary voting authority over off-card proposals. A company that omits a timely shareholder proposal from its proxy card could vote uninstructed proxies on that proposal, regardless of the proponent's solicitation efforts, if the company provides the required disclosure and opt-out check box. The proposal is intended to reduce the pressure on companies to place a proponent's proposal on the company card solely to preserve the ability to solicit proxies against it.
- Elimination of several legacy proxy process requirements. A company that has filed its Form 10-K for the most recently completed fiscal year would no longer have a separate Rule 14a-3 annual report obligation; the 20-business-day delivery period for certain proxy statements and Forms S-4 and F-4 incorporating information by reference would be eliminated; the Notice of Exempt Solicitation regime would be rescinded; and the minimum broker search period would be shortened from 20 to 5 business days.
Rule 14a-8 Would Give Way to State Law
Rule 14a-8 traces to a federal shareholder proposal mechanism adopted in 1942. It generally requires a company subject to the federal proxy rules to include a qualifying shareholder proposal and supporting statement in its proxy materials, at the company's expense, if the proponent satisfies the rule's ownership, holding period, and procedural requirements and the proposal does not fall within one of 13 bases for exclusion.
The SEC proposes to rescind that framework in its entirety. The SEC takes the view that Exchange Act Section 14(a) authorizes it to regulate the proxy solicitation process (including the form, timing, and content of solicitations) but does not authorize it to determine what matters shareholders are entitled to present for a vote or to require companies to include those matters in their proxy materials. In the SEC's view, those are questions of state corporate law absent express congressional authorization. The SEC also cites policy concerns as a rationale for rescinding Rule 14a-8, including compliance costs, the concentration of proposal activity among a relatively small group of proponents, low levels of voting support for many proposals, shifting staff interpretations, and the view that a uniform federal rule has inhibited the development of state law and private ordering.
If the proposal is adopted, state law and the constituent documents of the company would establish shareholder proposal rights. Questions historically addressed through SEC rules (and through the SEC's engagement in the Rule 14a-8 process by way of the no-action relief process, from which the Division of Corporation Finance has recently withdrawn[2]) would migrate to state courts, state legislatures, and company-specific governance arrangements. Given the ongoing competition among Delaware, Texas, and Nevada for corporate charters, the choice of jurisdiction of incorporation may take on added significance after any rescission of Rule 14a-8.
The proposing release also states that omitting a shareholder proposal from the proxy statement "is generally not, without more, materially false or misleading."
Rescission would not end shareholder activism. Shareholders could still present proposals at meetings where permitted, conduct their own proxy solicitations, seek binding or precatory governance changes where state law permits, vote against directors or management proposals, pursue proxy contests or litigation, and use direct engagement or public campaigns. Some pressure now expressed through Rule 14a-8 may therefore reappear through more company-specific mechanisms.
Rule 14a-4(c) Would Recalibrate Discretionary Voting Authority
The SEC separately proposes to amend Rule 14a-4(c) to permit a company to exercise discretionary proxy voting authority with respect to a shareholder proposal omitted from the company's proxy card. The SEC states that these amendments have an independent rationale and could be adopted even if Rule 14a-8 is retained.
Under current Rule 14a-4(c)(2), a proponent can prevent the company from exercising discretionary authority over a timely proposal by providing specified notice, filing its own proxy materials and soliciting the votes needed to approve the proposal. In this scenario, there are two sets of proxy materials, and proxies received through the company's card cannot be voted against the proposal omitted from the company's proxy card. That framework can effectively compel the company to include the proposal on its own card to solicit proxies to vote against it. The proposed amendments are intended to address that dynamic, including so-called zero-slate campaigns, without prohibiting shareholders from conducting their own solicitations.
Under the proposal, a company could exercise discretionary authority over a timely proposal omitted from its proxy card regardless of the proponent's solicitation efforts if the company:
- briefly describes the proposal in its proxy statement and states how it intends to exercise discretionary authority
- cross-references that disclosure on its proxy card and
- includes a check box on the proxy card allowing each shareholder to prevent the company from exercising discretionary authority with respect to that shareholder's shares
A shareholder seeking to cast an affirmative vote for the proposal generally would need to vote on the proponent's card. As for the company's card, leaving the box unchecked would permit the company to vote the shareholder's shares in the manner disclosed by the company; checking the box would produce a non-vote on the omitted proposal. Under the proposed rules, a company may use a single check box on its proxy card to cover all omitted proposals.
A shareholder proposal by itself would no longer trigger a preliminary company proxy filing. A preliminary filing generally would be required only when the company knows, or reasonably should know, that the proponent is conducting a non-exempt solicitation in opposition.
Modernization of Proxy Solicitation Mechanics
Elimination of annual reports delivery requirement and stock performance graph
Currently, Rule 14a-3(b) requires a proxy statement for a meeting at which directors are elected to be accompanied or preceded by an annual report to security holders, furnished to the SEC as Form ARS. The proposed amendments to would eliminate this obligation for companies that have filed a Form 10-K for the most recently completed fiscal year, on the view that virtually all of the information required in the annual report is already required in the Form 10-K and that the two filings are therefore largely duplicative.
Only if the Form 10-K has not yet been filed would a company need to furnish an annual report to security holders, and the limited disclosure items in the annual report that go beyond what is required by the Form 10-K would be removed. A company could still elect to send a "glossy" annual report to shareholders voluntarily. The Item 201(e) stock performance graph requirement would also be eliminated for all registrants other than investment companies, reflecting the SEC's view that comparable performance information is readily available from free online sources.
Elimination of delivery deadline for documents incorporated by reference
The SEC proposes to eliminate the requirement to send a proxy statement at least 20 business days before the meeting when the proxy statement incorporates specified information by reference. Corresponding requirements in Schedule 14C and Forms S-4 and F-4 would also be removed. The SEC reasons that the requirement was adopted when incorporated documents were not immediately available, whereas hyperlinks now make the waiting period less probative of investor access to information.
Elimination of notices of exempt solicitation
The SEC proposes to rescind Rule 14a-6(g) and Form PX14A6G, eliminating both the requirement and the ability to submit Notices of Exempt Solicitation. The current rule generally requires a person conducting certain written exempt solicitations under Rule 14a-2(b)(1) to furnish the written materials on EDGAR if the person beneficially owns more than $5 million of the subject class of registrant's securities. The SEC notes that approximately 80% of the 286 notices submitted in 2025 were voluntary filings by persons at or below the threshold or involved material that was already public elsewhere.
Broker searches period
The minimum broker search period under Rule 14a-13 would be reduced from twenty (20) business days to five (5) business days before the record date. The SEC cites the highly automated nature of the process and market feedback that searches often can be completed within three days. The change could increase flexibility for registrants to change their proxy solicitation timeline, if needed, which can be particularly helpful in contested director election scenarios.
Contact information
The cover pages of Schedules 14A and 14C would be required to identify a representative who can respond to questions or comments about the filing and provide that person's name, address, and telephone number; the address may be an e-mail address. The SEC notes that comparable contact information already appears in registration statements and tender offer filings, so the amendment is largely a conforming update.
What Public Companies Should Do Now
- Plan for the 2027 proxy season under the existing rules. Any rescission of Rule 14a-8 is unlikely to take effect in time to affect the 2027 proxy season. Calendar-year companies should therefore continue to prepare for the 2027 season under the current rules, preserve Rule 14a-8 proponent submission and Rule 14a-8(j) notice deadlines, and continue to assume that the SEC staff will remain outside of the no-action process pertaining to Rule 14a-8 exclusion requests.
- Anticipate proposals about proposal rights. The prospect of rescission may prompt proponents to use Rule 14a-8, while it remains available, to seek company-specific rights (through binding or precatory proposals) to include shareholder proposals in future proxy materials.
- Review governance documents. Companies should inventory charter, bylaw, and advance-notice provisions and develop a roadmap of the amendments they may wish to adopt to address the migration of shareholder proposal rights to state law.
[1] The Federal Register version of the proposal, titled "Rescission of Rule 14a-8's Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4," is available here. The Federal Register version of the proposal, titled "Proxy Solicitation Modernization," is available here.
[2] See Statement Regarding the Division of Corporation Finance's Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season dated November 17, 2025, available at: https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-role-exchange-act-rule-14a-8-process-current-proxy-season