Last week, the website on SEC.gov that houses shareholder proposal no-action letters was updated. To reflect the new process for the 2026 season, the shareholder proposal no-action letter page now directs to this site, which gives a quick summary of the past and present approaches:
Companies intending to exclude shareholder proposals from their proxy materials must notify the Commission and provide the information required by Exchange Act Rule 14a-8(j) no later than 80 calendar days before filing their definitive proxy materials.
Historically, most Rule 14a-8(j) notifications took the form of no-action requests where companies asked the Division of Corporation Finance to state its informal, non-binding views on whether it concurred that there was a legal basis to exclude shareholder proposals from their proxy materials under Rule 14a-8. On November 17, 2025, the Division announced that during the 2025-2026 proxy season it will not respond to no-action requests related to any basis for exclusion other than Rule 14a-8(i)(1). The Division will continue to respond to Rule 14a-8(i)(1) no-action requests until such time as it determines that there is sufficient guidance available to assist companies and proponents in their decision-making process.
The Division also will respond to Rule 14a-8(j) notifications when a company or its counsel includes, as part of the notification, an unqualified representation that the company has a reasonable basis to exclude the proposal.
The site then directs you here for Rule 14a-8 correspondence and Division responses, which includes four separate sites for:
– Rule 14a-8(j) Notifications With No Response
– Responses to Rule 14a-8(j) Notifications
– Incoming No-Action Requests Under 14a-8(i)(1)
– No-Action Responses Issued Under 14a-8(i)(1)
As Liz shared last week, at least one Rule 14a-8(j) notice & response had already been posted on the SEC’s website, although it related to a pending, and already posted no-action request submitted prior to the Staff’s statement, so it wasn’t entirely clear until this page was rolled out that all the notices & responses would be posted. It now looks like they will be.
There are a number of other procedural questions floating around, and I’m excited to hear from SEC Staff during tomorrow’s TheCorporateCounsel.net webcast, “This Year’s Rule 14a-8 Process: Corp Fin Staff Explains What You Need to Know.” Tune in from 11:00 am – 12:00 pm Eastern to hear Corp Fin Chief Counsel, Michael Seaman, and Corp Fin Counsel, Emma O’Hara, address some frequently asked questions from our own Liz Dunshee, Cooley’s Reid Hooper and Gibson Dunn’s Ron Mueller, who will also give their perspectives on strategy and how issuers should be thinking about and approaching the new process.
Keep in mind that this webcast is free — even for folks who aren’t members of TheCorporateCounsel.net. There’s no need to register in advance, even if you are not a member. But head to the webcast landing page linked above to add the webcast to your calendar so you don’t miss it! (I know if I don’t get a 15 min. prior reminder pop-up, I won’t show up anywhere!) This webcast also won’t be eligible for CLE credit — but we have lots of other options, both coming up live (see the home page) and on-demand — if you need that!
– Meredith Ervine
Stock buybacks — which were already trending in 2025 toward an all-time high — are getting another boon. The Treasury Department & the IRS recently released final regulations, effective on November 24, 2025, that provide guidance on the application of the 1% excise tax on stock buybacks by public companies. As this Debevoise article explains, the final regulations pare back many provisions that attracted taxpayer comments on the 2024 proposal. For example:
Funding Rule: The Final Regulations limit the international reach of the Buyback Tax by removing a controversial “funding rule” which appeared nowhere in the statute and which applied the Buyback Tax to the repurchase of public foreign stock by a foreign issuer if the proceeds of the repurchase were sourced from its U.S. affiliates.
Comment: The removal of the “funding rule” is a welcome relief, as it might have applied to buybacks that were determined to be funded with distributions from U.S. subsidiaries and ordinary course cash management and treasury functions. However, the Buyback Tax still applies to purchases of public foreign corporation stock by the corporation’s U.S. affiliates.
Preferred Stock: While the Final Regulations continue to apply the Buyback Tax to repurchases of preferred stock, they exempt the redemption of nonvoting, debt-like preferred stock from the application of the Buyback Tax. The Final Regulations also exempt the redemption of stock issued prior to the passage of the Buyback Tax on August 16, 2022, if such stock is subject to a mandatory redemption by the issuer or a unilateral put by the holder.
Comment: Public issuers of PIPEs or SPACs with redeemable shares that were issued prior to August 16, 2022, will now be able to redeem such shares without paying the Buyback Tax.
There’s other good news:
A corporation that has previously paid the Buyback Tax but would not be required to do so under the Final Regulations may receive a refund by filing an amended quarterly return after the effective date of the Final Regulations.
– Meredith Ervine
While most of us public company securities lawyers may not spend our day-to-day thinking about how audit firms might be subject to liability for statements in their clients’ IPO registration statements, that potential for liability certainly does impact the day-to-day of public companies and their lawyers because (I assume) it is something the higher-ups at audit firms think about. So here’s an interesting development out of the 9th Circuit, explained by this Morgan Lewis alert:
After Bloom Energy issued revisions to its 2016 and 2017 financial statements and a restatement of its 2018 and 2019 financial statements, Bloom stockholders amended an existing securities class action to add claims under Section 11 against the accounting firm that audited Bloom’s 2016 and 2017 financial statements. The case centers on the accounting for Managed Services Agreements (MSA) that Bloom used in connection with sale-leaseback arrangements . . .
In their complaint, plaintiffs alleged the accounting firm was liable under Section 11 for purportedly actionable statements and omissions in Bloom’s registration statement regarding its accounting for MSAs because the audit opinion did not identify that Bloom should have classified the MSAs as capital leases instead of operating leases. The accounting firm moved to dismiss, and the District Court granted the motion. Rather than amend their complaint, plaintiffs appealed to the Ninth Circuit.
On appeal, plaintiffs did not challenge the District Court’s dismissal of their claim that the audit opinion itself was false or misleading apart from its certification of the financial statements. . . Rather, plaintiffs argued that the accounting firm should be strictly liable under Section 11(a)(4) of the Securities Act for the misstatements in Bloom’s financial statements.
In early November, in Hunt v. PricewaterhouseCoopers LLP, the 9th Circuit rejected this argument and reiterated the negligence standard for accountant liability under Section 11:
Section 11 includes a due diligence defense, which requires that “accountants … exercise due diligence in investigating the materials provided to them using the accepted practices of their profession.” Accordingly, Section 11 imposes a negligence standard for an accountant’s liability, and in order for plaintiffs to prevail on a Section 11 claim, they must establish that an accounting firm did not have a “reasonable ground to believe” and did not believe, “at the time such part of the registration statement became effective, that the statements therein were true.”
But what about the claim that the audit opinion itself was false or misleading?
The Ninth Circuit next addressed applicability of the Supreme Court’s 2015 decision in Omnicare . . . in which the Supreme Court excluded statements of opinion from liability under Section 11 . . . Hunt was the first time the Ninth Circuit had occasion to consider applicability of Omnicare to auditors.
Without hesitation, the Ninth Circuit “extend[ed]” the holding in Omnicare to accountants and noted that doing so is consistent with Section 11’s due diligence defense. The Ninth Circuit held: “accountants may be liable for statements of fact if they did not act with due diligence; however, accountants will not be liable for statements of opinion, even if they reflect a subjective belief that admits there is a possibility of error, as long as the statement of opinion was sincerely held.”
Finally, the Ninth Circuit clarified that an “accountant’s certification of financial statements is nothing more than an opinion,” and held that, in this case, the accounting firm could not be liable for its audit opinion because that opinion “did not make any material misstatements of fact or omissions but rather was merely a statement of opinion based…upon the subjective judgment of the MSA classification.”
[Plus] Bloom’s determination of whether the accounting standards mandated that Bloom treat the MSAs as capital leases or operating leases involved significant accounting judgments, which rendered those determinations opinions, not facts. [So] Omnicare doubly applied because the accounting firm’s audit report was an opinion on top of company management’s opinion.
And thank goodness! Because the alert says:
Section 11 does not “make accountants guarantors of every statement made by the issuer; to make such a holding would turn the whole accounting world upside down” and make audits prohibitively expensive.
– Meredith Ervine
