For the second time in several months (see here), the SEC under Chairman Gary Gensler has reversed a position taken by the SEC under its prior leadership. Specifically, on November 3, the SEC issued Staff Legal Bulletin 14L, which rescinds three SLBs (14I, 14J, and 14K) and makes things easier for proponents of shareholder proposals regarding significant social policies. The new SLB states that the rescinded ones placed “undue emphasis…on evaluating the significance of a policy issue to a particular company at the expense of whether the proposal focuses on a significant social policy.” Accordingly, “the staff will no longer focus on determining the nexus between a policy issue and the company, but will instead focus on the social policy significance of the issue that is subject to the shareholder proposal.”
The new SLB also clarifies the ability of shareholder proponents to use graphics to convey information about their proposals, subject to compliance with other provisions of SEC Rule 14a-8 that may render graphics inappropriate. It also updates guidance on the form of proof of ownership letters submitted by proponents to establish their eligibility to submit proposals.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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