SEC Staff Ends No-Action Relief Program for Shareholder Proposals

On August 14, 2026, the U.S. Securities and Exchange Commission (the SEC or “Commission”)’s Division of Corporation Finance (the “Staff”) issued an updated statement regarding no-action requests to exclude shareholder proposals submitted under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Staff’s statement announces that it will discontinue entirely the Staff’s practice responding to shareholder proposal no-action requests effective immediately.

This action follows, and goes well beyond, the Staff’s November 17, 2025 statement suspending most of the no-action program, which we covered in our client alert. As we noted at the time, that earlier suspension was not an entire discontinuation of the Staff’s no-action relief program. The Staff would still consider no-action requests seeking to exclude certain precatory proposals under Rule 14a-8(i)(1) and would still issue a “no-objection” response where a company submitted, as part of its required Rule 14a-8(j) notice, an unqualified representation that it had a reasonable basis to exclude a proposal. Today’s statement ends both practices.

See the Staff’s statement.

What Changed?

Under the November 2025 approach, the Staff had carved out Rule 14a-8(i)(1) and preserved a limited response mechanism under Rule 14a-8(j). The updated statement eliminates both:

• The Staff will no longer respond to any no-action requests under Rule 14a-8, including requests submitted under Rule 14a-8(i)(1); and
• The Staff will no longer respond to Rule 14a-8(j) notices with a letter stating that it will not object if a company omits a proposal from its proxy materials.

The Staff grounded the change in the need to focus its resources on the review of filings under the Securities Act of 1933, as amended, and the Exchange Act, including statutorily required reviews, and pointed to the extensive body of existing Commission and Staff guidance already available to companies and proponents under Rule 14a-8. The statement also invokes the Commission’s long-standing position, dating to a 1976 release, that no response or action by the Commission or its Staff is required in response to these submissions.

The Division of Investment Management announced that it will take a substantially similar approach with respect to proposals involving investment companies.

Why Is the Staff Acting Now?

As it relates to consideration of no-action requests under Rule 14a-8(i)(1), the Staff disclosed that it did not receive a single such no-action request under Rule 14a-8(i)(1) during the entire 2025–2026 season. The Staff had invited companies to make arguments under this basis in November 2025 following SEC Chairman Paul Atkins’ October 2025 remarks questioning whether precatory proposals are a proper subject under Delaware law, which we covered in a prior alert. Now, however, this question remains untested and unanswered, and companies weighing the argument for the upcoming proxy season will have no Staff view to guide them.

In addition, practice demonstrated that during the 2025–2026 proxy season, Rule 14a-8(j) “no‑objection” letters were something of a formality. The Staff’s response to these notices was based solely on the company’s own representation and, by its terms, expressed no view on the merits of the asserted basis for exclusion. Viewed in that light, it could be said that the new Staff statement does not so much change the Staff’s role as formally retire a function that had already become ministerial.

What Actually Happened During the 2026 Season?

When the Staff first stepped back in November, we observed that companies had historically been reluctant to exclude shareholder proposals without the comfort of no-action relief—citing litigation risk, concern over alienating investors, and proxy advisory firm policies—and we noted that it remained unclear whether the Staff’s new posture would result in large numbers of exclusions.

The season provided at least a preliminary answer. In the 2025 season, companies submitted more than 360 no-action requests seeking to exclude proposals; in 2026, with no Staff review available, roughly 170 notices were submitted—a dramatic drop that suggests many companies chose to include proposals they might once have fought to exclude due to the lack of a proper “no-action letter.” In addition, there was some litigation from shareholders, but it remained relatively minor and contained. In short, the playing field became more uncertain, and many companies chose not to challenge shareholder proposals, but a large number of proposals were still excluded.

What Does This Mean for Companies?

Importantly, the Staff statement does not change the underlying requirements of Rule 14a-8. Rule 14a-8(j) still requires a company that intends to exclude a proposal to notify both the proponent and the Commission of the basis for exclusion and to do so no later than 80 calendar days before it files its definitive proxy statement. A company making such request now, however, will not receive anything back from the Staff.

As a result, the decision to exclude rests entirely with the company and its counsel, on the strength of Rule 14a-8, prior published guidance, and judicial decisions—the same authorities that have always governed the analysis.

Companies should also note some administrative housekeeping in the statement: the Staff’s dedicated shareholder proposal email address is no longer functional, and notices and correspondence must now be submitted through the SEC’s online Shareholder Proposal Form.

Practically, companies weighing exclusion this season and next should expect to:

• Build a clear, well-supported record for any exclusion, articulating the basis clearly, since that record may now be tested in litigation.
• Consider the decision to exclude a proposal or not taking into account the particular proponent and the nature of the proposal.
• Be prepared to explain the basis for exclusion to investors and proxy advisory firms, which have signaled that an unexplained or aggressive exclusion is more likely to draw an adverse reaction than the fact of exclusion itself.

Looking Ahead

Today’s statement is another step in the Commission’s broader reassessment of the shareholder proposal framework, a reassessment that Chairman Atkins has signaled will include Rule 14a-8 itself. “Shareholder Proposal Modernization” remains on the Commission’s regulatory agenda, but formal rulemaking is unlikely to take effect in the short term.

For now, companies should assume that the Staff’s hands-off posture will persist into the 2026–2027 proxy season.

Only time will tell whether this proves to be a durable feature of the proxy landscape or a stop along the way toward a more fundamental rewriting of Rule 14a-8.

This alert is provided for general informational purposes and does not constitute legal advice.