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December 20, 2021

SEC Staff Addresses PII in Shareholder Proposal No-Action Requests

The Corp Fin Staff addressed the procedural aspects of shareholder proposal no-action requests again on Friday, requesting that, effective immediately, companies and shareholder proponents redact all personally identifiable and other sensitive information (e.g., brokerage account numbers, physical addresses, email addresses and telephone numbers) from Rule 14a-8 submissions and related materials prior to submitting them to Corp Fin. The Staff notes:

For example, companies should redact personally identifiable information from an individual shareholder’s cover letter accompanying the proposal. Shareholder proponents should also limit the personally identifiable and sensitive information in the materials they provide to companies by including only the information that is necessary to establish their eligibility to submit the proposal and for the company to communicate with them. The staff may require parties to resubmit any materials we receive that contain personally identifiable or sensitive information, in which case the staff will not consider the substance of those materials until they are resubmitted.

The Staff goes on to indicate that the applicable guidance in prior Staff Legal Bulletins only calls for the submission of all relevant correspondence in Rule 14a-8 submissions. The Staff states that the amount of personally identifiable and sensitive information would be reduced dramatically if companies did not submit documents that are not relevant to the Staff’s consideration of a no-action request. For example, the Staff says that a company should only submit a shareholder proponent’s proof of ownership documents if the company is contesting a proponent’s eligibility to submit a proposal under Rule 14a-8(b).

In the past, the Staff has taken upon itself to redact, to the extent possible, personally identifiable and other sensitive information before posting the materials on www.sec.gov, but the Staff notes “this process can result in delays in the public dissemination of these materials.”

– Dave Lynn