SEC Provides New Guidance on Shareholder Proposals

On November 3, 2021, the Division of Corporation Finance of the SEC (the “Staff”) issued Staff Legal Bulletin (“SLB”) No. 14L, which rescinds SLBs Nos. 14I, 14J and 14K, all of which provided guidance with respect to no-action letter requests that sought relief from the Staff to exclude shareholder proposals on the basis of Rule 14a-8(i)(7) and Rule 14a-8(i)(5).

SLB No. 14L also provides guidance on (i) certain technical exclusions, (ii) the use of graphics and images in proposals and (iii) the use of email between proponents and companies.

The likely effect of SLB No. 14L will be to reduce the number of environmental and social policy proposals that the Staff will agree may be excluded from proxy statements under the ordinary business and economic relevance exceptions of Rule 14a-8.

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