The U.S. Securities and Exchange Commission proposed rescinding Rule 14a-8, which governs the inclusion of shareholder proposals in company proxy materials, following its broader review of the rule. The SEC argues that shareholder proposal frameworks are matters of state corporate law and that Congress has not authorized the agency to determine which matters are proper subjects for shareholder votes. If adopted, the change would leave states and, where state law permits, company governing documents to establish the applicable framework, with disputes handled in state courts or other permitted forums. Related amendments to Rule 14a-4 would allow companies to exercise discretionary proxy authority over matters presented at shareholder meetings but omitted from their proxy cards, while enabling shareholders to withhold that authority. A separate proposal would eliminate the requirement for a distinct annual report to security holders when a Form 10-K has been filed, remove the 20-business-day waiting period for certain materials incorporating information by reference, end mandatory notices for specified exempt solicitations and shorten the broker search period from 20 to five business days.

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