The SEC Steps Out of Rule 14a-8

On August 14, 2026, the SEC’s Division of Corporation Finance (the “Division”) issued a statement announcing that it will remove itself entirely from the Rule 14a-8 process. The Division’s announcement takes effect immediately and will continue unless and until announced otherwise.

Under the traditional Rule 14a-8 process that had been in place for decades, a company that wished to exclude a shareholder proposal would submit a no-action request to the Division laying out the specific bases and rationale for exclusion. Division staff would typically then issue a no-action letter stating either that it would not recommend enforcement action if the company omitted the proposal, or that it was unable to concur in the company’s view as to exclusion.

The Division changed its tack for the 2025–2026 proxy season by deciding only to respond to no-action requests made under Rule 14a-8(i)(1), relating to exclusions of proposals deemed an improper subject for shareholder action under state law. For other exclusionary bases under Rule 14a-8, the Division allowed companies that wanted a response to provide an unqualified representation that they had a reasonable basis to exclude the proposal and in that situation, the Division would issue a response that it would not object to exclusion. Companies were thus empowered to make their own exclusion determinations, with the Division staff no longer independently assessing the merits.

The Division’s most recent statement updates the prior approach to the Rule 14a-8 process in two respects. First, the Division will no longer respond to Rule 14a-8 no-action requests of any kind, including requests to exclude a proposal pursuant to Rule 14a-8(i)(1) (the Division noted that it had not received any Rule 14a-8(i)(1) no-action requests during the 2025–2026 season). Second, the Division will no longer respond to notices filed under Rule 14a-8(j) with a letter stating that it will not object to omission of a proposal.

As with the prior Rule 14a-8 statement, the Division framed its decision as a matter of resource allocation, given the large volume of registration statements and other filings that require prompt staff attention, in contrast to the extensive body of guidance from the Commission and the staff available to both companies and proponents on Rule 14a-8.

Although the Division’s most recent statement makes clear that the Division is entirely removed from a role in the Rule 14a-8 process, the statement does not amend Rule 14a-8. The rule’s procedural and substantive exclusions for Rule 14a-8 proposals remain available, and companies that intend to exclude a proposal must still comply with Rule 14a-8(j) by submitting a notice to the Commission and the proponent no later than 80 calendar days before filing a definitive proxy statement.

As with the 2026 season, companies planning to exclude proposals under Rule 14a-8 should keep in mind several considerations, including the potential for proponents whose proposals are excluded to turn to litigation. At least five lawsuits on this topic were filed against companies in 2026, and several companies either settled or ultimately included the challenged proposals in their proxy statements. Companies facing proposals under Rule 14a-8 should consider the viability of negotiation with proponents in the hopes that such engagement might produce withdrawals or narrowed proposals without either exclusion litigation or an unwanted ballot item. For proposals on likely low-vote topics, companies may also decide the aggravation of including the proposal in the proxy and on the ballot is less burdensome than dealing with a difficult proponent or risking a litigation scenario.

Vinson & Elkins will continue to monitor these developments, including any further SEC action on Rule 14a-8 and shareholder proposals. If your company would like assistance evaluating shareholder proposals, preparing Rule 14a-8(j) notices, or developing an engagement and exclusion strategy for the 2027 proxy season, we would be happy to help.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.