On November 17, 2025, the United States Securities and Exchange Commission (SEC)’s Division of Corporation Finance announced that it would significantly curtail its review of no-action submission requests for the upcoming proxy season (October 2025–September 30, 2026).
According to its statement, the SEC staff will not respond to no-action requests nor express any views on companies’ intended reliance on any bases for exclusion under Rule 14a-8 of the Securities Exchange Act (Exchange Act) (except for those based on Rule 14a-8(i)(1), which generally relates to proposals that are not a proper subject for shareholder action under state law).
New Rule 14a-8 policy
The announcement sets out a bifurcated process for (1) procedural and substantive grounds for the exclusion of shareholder proposals under all basis for exclusion under Rule 14a-8 other than Rule 14a-8(i)(1) and (2) grounds for exclusion under Rule 14a-8(i)(1). Companies seeking to exclude shareholder proposals under Rule 14a-8 are still required to notify the SEC staff and the proponent at least 80 calendar days before filing their definitive proxy statement of their intent to exclude the proposal in compliance with Rule 14a-8(j).
Companies should be aware that while informational in nature, the notification pursuant to Rule 14a-8(j) must include “[a]n explanation of why the company believes that it may exclude the proposal, which should, if possible, refer to the most recent applicable authority, such as prior Division letters issued under the rule.”
Recent statements regarding Rule 14a-8(i)(1)
The SEC cited “recent developments regarding the application of state law and Rule 14a-8(i)(1)” and the lack of “a sufficient body of applicable guidance for companies and proponents to rely on” in its decision to preserve the review of no-action requests based on the Rule 14a-8(i)(1) exclusion. It is notable that SEC Chair Paul Atkins also recently commented on the Rule 14a-8(i)(1) exclusion. As discussed in our prior article regarding the future of Rule 14a-8, Chairman Atkins indicated that the SEC would be receptive to requests from Delaware incorporated companies seeking to exclude precatory shareholder proposals based on Rule 14a-8(i)(1), and that such requests would likely prevail provided that they were supported by opinions from Delaware counsel.
Key considerations for the upcoming proxy season
If a company intends to rely on Rule14a-8(i)(1) to exclude a shareholder proposal, it should follow the current procedures that include submitting a no-action letter to the SEC staff. However, rather than the previous process in which the SEC staff would formally review and respond to each such no-action letter, the SEC staff will no longer review and respond to the procedural and substantive ground raised by a company to exclude a particular proposal for the upcoming proxy season.
In addition, if a company wishes to have a formal record of corresponding with the SEC staff as part of its decision to exclude a proposal, the company will need to include unqualified representations in its correspondence indicating that it has reasonable bases for exclusion, relying on Rule 14a-8, prior published guidance, and/or judicial decisions.
In such an instance, the Division’s response will be limited to stating that, based solely on the company’s representation, the SEC staff will not object to the exclusion. Importantly, the Division will no longer evaluate the adequacy of the representation or the merits of the exclusion basis asserted by a company for the upcoming season.
The guidance also applies to no-action requests received before October 1, 2025, to which the SEC staff has not responded. Accordingly, companies wishing to receive a response for previously submitted requests must provide the required representation. All notifications must be submitted via the Division’s online Shareholder Proposal Form.
On the same day of the announcement, SEC Commissioner Caroline Crenshaw issued a response criticizing the policy for appearing to benefit companies at the expense of shareholders, stating:
“This is the latest in a parade of actions by this Commission that will ring the death knell for corporate governance and shareholder democracy, deny voice to the equity owners of corporations, and elevate management to untouchable status.”
Implications for companies
The Division’s new policy regarding Rule 14a-8 proposals is a significant change to the current process. While it is not clear whether there will be any challenges to this new process, the policy could potentially reduce the volume of shareholder proposals for the upcoming proxy season.
Companies receiving shareholder proposals for their upcoming annual meetings stand in a unique position of deciding whether to exclude a shareholder proposal without the ability to rely on a no-action ruling, unless the company has to ability to argue an exclusion under the Rule 14a-8(i)(1) basis.
While the SEC no-action relief is non-binding, companies or shareholder proponents previously did not often resort to the courts to address the appropriateness of excluding a shareholder proposal.
Given the change in the SEC’s policy for this proxy season, companies should also bear in mind that shareholder proponents still have the ability to seek judicial review of exclusions under Rule 14a-8, which could become more prevalent during the upcoming proxy season.
As a result, companies should carefully assess whether they have one or more reasonable bases to seek to exclude a shareholder proposal under Rule 14a-8, as well as the likelihood of a court challenge. Companies are encouraged to work with legal counsel in assessing next steps, including whether, in light of this SEC policy change, a formal withdrawal of a submitted no-action request would be in order to the extent the company decides to include the proposal in its proxy statement. (See Staff Legal Bulletin No. 14 (Questions 14 and 15).
DLA Piper will continue to monitor developments related to Rule 14a-8 and shareholder proposals for the upcoming proxy season.
For more information, please contact the authors.