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December 14, 2021

Shareholder Proposals: Corp Fin Returns to Written Responses to No-Action Requests

A couple of years ago, Corp Fin initiated a policy under which some Rule 14a-8 no-action requests received an oral response only.  Yesterday, Corp Fin announced that it was discontinuing that policy. Here’s an excerpt:

We have reconsidered this approach, and after review of the practice we believe that written responses will provide greater transparency and certainty to shareholder proponents and companies alike. Beginning with the publication of this announcement, we will return to our prior practice and the staff will once again respond to each shareholder proposal no-action request with a written letter, similar to those issued in prior years. Our response letters will be posted publicly on the Division’s website in a timely manner. We will no longer communicate our responses via a chart, but we expect to publish a chart upon completion of the proxy season.

The original decision to provide oral responses to some letters was prompted in part by Corp Fin’s desire to enhance the efficiency of the no-action process, but my guess is that this change in policy is likely to have the opposite effect. At the very least, it isn’t going to ease the burden on the Staff when it comes to processing no-action requests – which may well spike this year as a result of Corp Fin’s issuance of SLB 14L.

John Jenkins