The Securities and Exchange Commission today voted to reopen the comment period on the proposed rules for the use of universal proxy cards in all non-exempt solicitations for contested director elections.
“This is an important step toward finalizing rules that will facilitate clarity and efficiency for shareholders voting in director elections,” said SEC Acting Chair Allison Herren Lee.
“Reopening the comment period will allow the public to share additional views on the use of universal proxy cards in director elections, particularly in light of the corporate governance developments that have occurred since the Commission issued its proposal,” added Acting Director of the SEC’s Division of Corporation Finance John Coates.
The reopened comment period permits interested parties to submit further comments and data on the rule amendments proposed in 2016 as well as additional comments on the questions raised in the reopening release. It further allows interested parties to comment on developments since 2016 when the proposing release was issued, including the potential economic and other effects of the proposal in light of any such developments.
The public comment period will remain open for 30 days following publication of the release in the Federal Register.
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April 16, 2021
In October 2016, the Commission proposed amendments and new rules to, among other things:
- require the use of universal proxy cards in all non-exempt director election contests
- revise the consent required of a bona fide director nominee
- eliminate the short slate rule
- prescribe certain filing, notice, and solicitation requirements of registrants and dissidents when using universal proxy cards
- prescribe formatting and other requirements for universal proxy cards
The Commission received numerous comment letters on the 2016 proposal. In light of the regulatory and market developments since 2016, the Commission believes it is appropriate for the public to have the opportunity to submit additional comments on the 2016 proposal, and to address the additional questions raised in the reopening release issued today.
The Commission is seeking comment on all aspects of the 2016 proposal as well as on certain additional questions posed in the reopening release. These requests for comment include, among other things, whether the proposed rule changes should be extended to registered investment companies and business development companies and whether dissidents should be required to solicit more than a majority of the voting power of shares entitled to vote, as was proposed in 2016.
The comment period will be open for 30 days after the release is published in the Federal Register.