SEC Staff Suspends No-Action Relief for Most Shareholder Proposals

On November 17, 2025, the U.S. Securities and Exchange Commission’s (the SEC or “Commission”) Division of Corporation Finance (the “Staff”) issued a statement announcing that the Staff will largely suspend its practice of issuing “no-action” letters to exclude shareholder proposals pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, during the 2026 proxy season.

Although the Staff's statement cites the “current resource and timing considerations” following the recent government shutdown as a reason for suspending the shareholder proposal no-action program, the Staff noted that it would nonetheless consider no-action requests under Rule 14a-8(i)(1) to exclude certain precatory shareholder proposals during the 2026 proxy season. This appears to be the only instance where the Staff will consider no-action requests and follows a recent statement by SEC Chairman Paul Atkins, that cast doubt on whether certain precatory proposals are proper subjects for shareholder action under Delaware law. Even so, the Staff’s statement notes that it will “continue to review and express its views on no-action requests related to Rule 14a-8(i)(1) until such time as it determines there is sufficient guidance available to assist companies and proponents in their decision-making process.”

See the Staff’s statement.

What Does This Mean for Companies?

The Staff states that it will not issue no-action letters outside of Rule 14a-8(i)(1) for the 2026 proxy season, defined as October 1, 2025 through September 30, 2026. Currently pending no-action requests will also not receive Staff letters. In other words, most shareholder proposal no-action letters are suspended until September 2026.

While the Staff’s announcement is undoubtedly surprising and representative of a paradigm shift in the shareholder proposal ecosystem, it is worth noting that Rule 14a-8 remains intact for the time being and Staff no-action relief has always been informal and non-binding. Where they are confident that an exclusion applies, companies may exclude shareholder proposals without the comfort of no-action relief.

In doing so, companies must remember that Rule 14a-8(j) requires notification to both proponents and the SEC of a company’s intent to exclude a proposal no later than 80 calendar days before filing a definitive proxy statement. Recognizing that companies often feel uncomfortable proceeding without no-action relief, the Staff notes that:

[I]f a company wishes to receive a response for any proposal that it intends to exclude pursuant to a basis other than Rule 14a-8(i)(1), the company or its counsel 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.

In such situations, the Staff will provide a letter that it will not object to the company’s action. The letter, however, will not evaluate the adequacy of the company’s representation or express a view on the basis or bases the company intends to rely on in excluding the proposal.

The Staff also notes that a company’s Rule 14a-8(j) notification should be “limited to the information required by the rule,” as well as an unqualified representation that the company has a reasonable basis to exclude the proposal. While it appears that the Staff is seeking a short, informative notice, companies are reminded that Rule 14a-8(j)(2)(ii) requires “an explanation of why the company believes that it may exclude the proposal, which should, if possible, refer to the most recent applicable authority, such as prior Division letters issued under the rule.” Despite an apparent tension between the Staff’s statement and the rule, we think that in most cases a short explanation would be sufficient. Notices submitted pursuant to Rule 14a-8(j) should be submitted using the online intake form on the SEC’s website.

Do We Expect Companies to Exclude Many Proposals Without No-Action Relief?

It is unclear whether the Staff’s new position will result in large numbers of shareholder proposals being excluded.  Looking at history, companies typically have been reluctant to exclude proposals without clear no-action relief for a number of reasons, including litigation risk, concerns over alienating investors, and proxy advisory firm policies, which generally penalize companies for acting without no-action relief. In the instances where companies have excluded proposals without Staff action, the occasions have often been limited to relatively clear violations of the procedural rules of Rule 14a-8. Only time will tell if the Staff’s updated position will result in a streamlined approach to the exclusion of shareholder proposals or in a more complex and difficult landscape.