Overview of the announcement

On November 17, 2025, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance announced a significant shift in its approach to shareholder proposal exclusions under Exchange Act Rule 14a-8. For the 2025–26 proxy season (October 1, 2025 – September 30, 2026), the Division will not respond to no-action requests seeking to exclude shareholder proposals—except for requests under Rule 14a-8(i)(1), which addresses whether a proposal is a proper subject for shareholder action under state law. The Division will continue to review and express its views on no-action requests under Rule 14a-8(i)(1). Companies also must still comply with Rule 14a-8(j) by notifying the SEC and the proponent at least 80 calendar days before filing definitive proxy materials, but this notice is informational only.

In addition, companies that wish to exclude shareholder proposals on any basis other than Rule 14a-8(i)(1) can use a new streamlined process to request a written response of no objection from the Division. The company must include, as part of its notification pursuant to Rule 14a-8(j), “an unqualified representation that the company has a reasonable basis to exclude the proposal based on the provisions of Rule 14a-8, prior published guidance and/or judicial decisions.” The Division, in turn, “will respond with a letter indicating that, based solely on the company’s or counsel’s representation, the Division will not object if the company omits the proposal from its proxy materials.” This appears to be automatic upon submission of a complete Rule 14a-8(j) notification, together with the representation referenced in the announcement: When issuing its letter of no objection, the Division “will not evaluate the adequacy of the representation or express a view on” the company’s basis for exclusion.

The announcement applies to the current proxy season as well as to outstanding no-action requests received before October 1, 2025. To take advantage of the new process, companies with outstanding requests should submit a notice that includes the representation, and the time of the initial submission will be deemed to apply for purposes of the 80-day requirement.

Overview of Rule 14a-8

Rule 14a-8 provides a mechanism for qualifying shareholders to include proposals in a company’s proxy statement for annual or special meetings. It sets procedural and substantive requirements for proposals and outlines 13 bases for exclusion, ranging from ordinary business matters to economic relevance. Historically, companies seeking to exclude proposals have relied on no-action letters from the SEC for assurance that omission would not trigger enforcement.

In the announcement, the SEC explained that there is an extensive body of guidance for companies and proponents to rely on when excluding proposals on any basis other than Rule 14a-8(i)(1). By excluding Rule 14a-8(i)(1), the announcement appears consistent with recent remarks by Commissioner Paul Atkins, who suggested in an October keynote that many so-called “precatory proposals”—those that call for actions that are not binding on the company and often relate to environmental and social issues—may not be “proper subjects” under state law, signaling a broader shift toward limiting the role of advisory proposals in corporate governance and refocusing proxy votes on core business matters. The announcement drew a separate statement from Commissioner Caroline Crenshaw, who criticized the decision as an overstep that is hostile to shareholders and potentially misleading.

Key implications

  • Issuer discretion: Companies now have greater discretion in deciding whether to exclude shareholder proposals. At the same time, that discretion comes with greater responsibility on companies to assess whether exclusions comply with Rule 14a-8 and prior guidance. While optional “no objection” letters remain available through the streamlined process, they will not reflect any substantive SEC review, and staff responses are not binding on the SEC or other divisions and offices and do not preclude the SEC from taking enforcement action in appropriate circumstances. Further, proxy advisors may recommend voting against directors who support questionable exclusions, even with the benefit of a no-objection letter. Still, companies that want some comfort in the form of an SEC representation of no objection to exclusion can take advantage of the streamlined process by obtaining the representation described in the announcement.
  • Increased negotiations: Companies can expect an increase in negotiations with proponents of stockholder proposals as the SEC takes a step back from its referee approach.
  • Litigation incentives: Without staff views, disputes may migrate to proxy campaigns and expedited litigation, increasing costs and compressing already tight proxy calendars. The absence of a staff “screen” may also encourage more aggressive exclusion decisions by companies and more frequent challenges by proponents. And, if a company has obtained a no-objection letter from the Division, any litigation will likely need to address the significance of that letter and the underlying unqualified representation by the company.