On November 17, 2025, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission (the SEC) announced a significant shift in its approach to no-action requests for the current proxy season. Effective immediately, the Division will largely refrain from providing responses to no-action requests from companies seeking to exclude shareholder proposals from their proxy materials under Exchange Act Rule 14a-8. The Division stated it will only consider and provide substantive responses on no-action requests in cases where a company seeks to exclude a proposal on the basis that the proposal is not a proper action under state law (that is, under Rule 14a-8(i)(1)). This change applies to the 2025-2026 proxy season, covering October 1, 2025, through September 30, 2026, and includes pending requests submitted before October 1, 2025, where the Division has not yet responded.
In the announcement, the Division cited resource and timing constraints stemming from the recent government shutdown and a surge in registration statements and other filings requiring immediate attention as factors influencing its decision to change its practice. The Division emphasized that an extensive body of Commission and staff guidance already exists for most exclusion bases under Rule 14a-8. By contrast, it noted the lack of clarity around the application of state law and Rule 14a-8(i)(1) in relation to non-binding (often known as “precatory”) proposals as warranting continued staff involvement; thus, the Division will continue to review and respond to no-action requests under this exclusion. Please see our prior alert for a discussion of SEC Chairman Paul S. Atkins’ recent remarks on the intersection of state law and precatory proposals as one of several areas of possible reform.
Implications for Companies and Timing
If a company intends to omit a shareholder proposal, it must continue to follow the procedural requirements in Rule 14a-8, including submitting a notice to the SEC and the proponent of the proposal at least 80 days before filing definitive proxy materials as required under Rule 14a-8(j). This notice must be submitted online using the SEC’s Shareholder Proposal Form.
If a company wishes to receive a response to its notice regarding its decision to exclude a proposal on a basis other than Rule 14a-8(i)(1), it must include in its Rule 14a-8(j) notice an unqualified representation that it has a reasonable basis to omit the proposal based on the rule, prior guidance, or judicial decisions. In those cases, the Division will issue a letter stating that, based solely on the company’s representation (i.e., without evaluating the merits), it will not object if the company omits the proposal. Companies with previously submitted pending no-action requests on bases other than Rule 14a-8(i)(1) that want a response should supplement their Rule 14a-1(j) notice with the required representation.
The Division’s statement is a dramatic shift in the landscape for companies and shareholder proponents this proxy season. Companies will want to carefully consider available guidance in making a determination to exclude a proposal, as well as the potential consequences for doing so, such as increased shareholder scrutiny, negative attention from proxy advisory firms, or actions to seek a private remedy.
For more information, please contact Tamara Brightwell, Richard Blake, Doug Schnell, Jose Macias, Amy Simmerman, Lisa Stimmell, or any member of the firm’s Public Company Representation, Corporate Governance, or Securities Litigation groups.
