November 3, 2017

Shareholder Proposals: Corp Fin Issues New (& Big) Staff Legal Bulletin!

A few days ago, Corp Fin issued Staff Legal Bulletin No. 14I – it’s first SLB on shareholder proposals in two years. And it’s a big one. As CII notes, the SLB creates a path for companies to omit proposals by presenting a “well-developed” description to the Corp Fin Staff of the board’s analysis of the issue raised by the proposal & the issue’s significance to the company – and the SLB places a greater expectation on proponents to tie social or ethical issues to a significant effect on the company’s business.

Here’s a summary of the four main items in the SLB from the Stinson Leonard Street blog:

– Deference to company analyses of significant policy issues under the Rule 14a-8(i)(7)’s “ordinary business” exclusion basis
– Expansion of the “economic relevance” exception under Rule 14a-8(i)(5)
– Additional eligibility requirements for proposals “by proxy” under Rule 14a-8(b)
– Application of Rule 14a-8(d) to the use of images in shareholder proposals & supporting statements and encouraged reliance on Rule 14a-8(i)(3)’s “false and misleading” standard for exclusion

In her Davis Polk blog, Ning Chiu does a good job of identifying the open issues relating to how companies might be able to create the board’s analysis over significant policy issues under (i)(7). More on this SLB soon…

“NASDAQ” v. “Nasdaq”? Branding 101

As Steve Quinlivan noted in this blog, Nasdaq has filed an immediately effective rule change with the SEC to reflect a corporate branding change to Nasdaq’s name. If you read through our stuff – including our fabulous “Nasdaq Listing Standards Handbook” – you’ll see that we have never used “all caps” for Nasdaq. It ain’t Plain English. I’ll use all caps for acronyms – like the “SEC” – but I won’t use all caps otherwise. It’s bad branding…

The irony is that Nasdaq didn’t use all caps long ago – but then changed it to “NASDAQ.” I think it was originally all caps, as it was an acronym for National Association of Securities Dealers Automated Quotations. So it went from upper case to lower case to upper case and now again lower case…

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Broc Romanek