SEC Ends No-Action Letters for Rule 14a-8 Shareholder Proposal Exclusions

The SEC's Division of Corporation Finance announced it will no longer respond to any no-action requests under Exchange Act Rule 14a-8, effective immediately. This permanently expands a 2025 policy that had already sharply curtailed such responses. Companies have historically relied on these letters to gain the Division's informal agreement that a shareholder proposal could be legally excluded from proxy materials. Without this authoritative backstop, companies and their counsel bear the full risk of exclusion decisions, likely leading to more litigation from shareholder proponents challenging those determinations. Companies must still notify the SEC and proponents of any decision to exclude a proposal 80 days before filing definitive proxy materials, but counsel should now draft these notices for an audience of the proponent and, potentially, a court.