On August 14, 2026, the SEC’s Division of Corporation Finance updated its statement on how it handles Rule 14a-8 shareholder proposals. The Division will now stop responding to shareholder proposal related no-action requests of any kind, and it will no longer issue “no-objection” letters in response to a company’s representation that it has a reasonable basis to exclude. The change is effective immediately and extends the modified process the Division rolled out last November, which we covered here.

For the coming proxy season, this reads as a slightly modified continuation of last season’s approach. The underlying rule has not changed, so a company weighing an exclusion is faced with the same set of exclusions it always has. The main practical difference is that companies will need to analyze the applicability of exclusions without expectation of a response from the Division; including a reasonable-basis representation will no longer elicit a no-objection response. Companies will still be required to submit an explanation of why the company believes that it may exclude a proposal. The statement has no end date and applies “unless and until the Division announces otherwise,” so we expect this to be the status quo until the SEC completes its planned Rule 14a-8 rulemaking, unless pending litigation against the SEC over last season’s process revision forces a change sooner.

What Changed

Two features of last season’s process go away. First, the Division will no longer give a substantive response to a no-action request under Rule 14a-8(i)(1), the “improper under state law” ground, the only basis it had kept open. Chair Atkin’s has noted that that option went unused last season. Second, the Division will no longer issue a “no-objection” letter to a company that includes an unqualified representation that it has a reasonable basis to exclude.

One additional change worth noting: the Division’s dedicated shareholder proposal email address is no longer active. Companies must still file a Rule 14a-8(j) notice with the Commission and copy the proponent when they intend to exclude, but notices, questions, and other correspondence now all route through the online Shareholder Proposal Form; so any reference to the old email address in a checklist or template should be removed.

What Companies Should Consider If They Receive a Proposal

A company’s playbook can essentially mirror last season, the first full run under this no-substantive-response posture, which was scheduled to apply through September 30, 2026. Rule 14a-8 still applies in full. In evaluating whether to exclude a proposal, a company should work through the following steps:

Assess whether an exclusion applies. The threshold question is whether a procedural or substantive basis for exclusion fits the proposal. A company should work through the bases the rule provides, consider recent applicable authority, including existing Division letters, and assess whether any exclusions apply.

Weigh any available exclusion against its costs. If a basis does appear to apply, a company should weigh the decision to exclude against its costs. Proponents deployed a range of approaches in response to exclusion decisions last season that companies should factor into this analysis. For example, citing proposal exclusion as a board oversight failure, some proponents threatened ‘zero slate’ campaigns, conducted ‘vote-no’ campaigns, and publicized exclusion decisions through independent ‘exempt solicitation’ publication portals (given that Division guidance now states that the staff will object to voluntary Notices of Exempt Solicitation on EDGAR). Litigation risk also plays a bigger role in the analysis. The cases filed last season saw mixed results: at the preliminary-injunction stage, one court required inclusion and two denied injunctive relief, while three other cases settled before courts ruled on the requested relief. Companies should weigh these risks, including the cost and distraction of an exclusion notice and potential dispute, against the burdens of including the proposal in the proxy.

Consider how an exclusion would read to a court. Under the historical process, the SEC’s back-and-forth with companies and proponents occasionally suggested proposal modification rather than exclusion — a vagueness concern under 14a-8(i)(3), for instance, might be resolved by narrowing the proposal’s language. With the Division no longer filling that role, a judge may be the first neutral party to evaluate the decision, and may factor in whether the company engaged in the kind of cooperative process the SEC historically facilitated. In one case last season, a court suggested that a vagueness objection could have been addressed through modification by the parties rather than total exclusion, crediting the idea that certain curable defects ought to be flagged and worked through before a company moves to exclude entirely.

If proceeding to exclude, prepare a full no-action-letter-style record. If a company decides to exclude, the reasonable-basis representation and the traditional request for the staff’s views no longer serve a purpose, because the Division will not respond. Even so, we believe there remains real value in preparing a full no-action letter style analysis, setting out each applicable basis and the rationale behind it. That record satisfies the Rule 14a-8(j) notice standard, documents the company’s analysis and the arguments supporting it, and can serve as a ready-made response when investors, proxy advisors, or a judge ask for details about why the company excluded.

Anticipate proxy-advisor review of exclusion rationales. Proxy advisors have signaled they will scrutinize the basis for exclusion. For example, ISS expects a clear explanation of why a company excluded, including any relevant SEC or court precedent, and has cautioned that a weak rationale could draw a flag or, in rare cases, a recommendation against directors. Glass Lewis also takes a skeptical view of unilateral company actions to exclude or restrict shareholder proposals, warning that unjustified exclusions can trigger negative voting recommendations against governance committee members.

One wrinkle the statement does not address: whether the SEC will continue posting exclusion notices on its Rule 14a-8 correspondence page. It did so last season for Rule 14a-8(j) notices whether or not a Division response was forthcoming, but the resource-conservation rationale and the Division’s broader withdrawal from the process leave that practice uncertain. If the SEC stops posting them, the notices may no longer be readily available through a centralized online source. A company that nonetheless considers it important to make its exclusion decision and rationale readily accessible to investors and proxy advisors would need to consider how best to do so. Notably, last season some companies included an explanation of their exclusion rationale directly in the proxy statement, which may be the most logical place to include this rationale absent a readily accessible public forum. 

Looking Ahead

For now, companies should adjust for the changes described above but otherwise proceed with the same careful analysis and approach historically used in proposal exclusion determinations.

As for what may come next: a December 2025 executive order directed the SEC Chair to consider revising or rescinding rules and guidance relating to shareholder proposals, including Rule 14a-8, that are inconsistent with the order, and “Shareholder Proposal Modernization“ now sits on the Commission’s regulatory agenda. Chairman Atkins has signaled that the staff’s historical role is unnecessary, and recent remarks suggest the Commission is evaluating whether to restructure the rule more fundamentally or pare it back entirely, deferring more to state law. Any formal rulemaking would need to go through notice and comment, so it is unlikely to take effect in time for the 2026-2027 season.

One case is worth watching in parallel. In Interfaith Center on Corporate Responsibility v. SEC, No. 1:26-cv-00957 (D.D.C.), filed in March 2026, ICCR and As You Sow argue that the Division’s revised approach functions as a legislative rule adopted without the notice-and-comment procedures required by the Administrative Procedure Act. The plaintiffs have asked the court to declare the SEC’s no-objection policy from prior to this updated notice unlawful and to set aside, vacate, and/or permanently enjoin it. The Division’s decision to stop responding to no-action requests altogether may bear on that dispute: the new posture arguably reflects the same withdrawal from the process that the plaintiffs challenge, but it also complicates the requested relief, because it is unclear how an order vacating the prior no-objection policy would operate now that the Division has layered a second change on top of it. As of now, the plaintiffs have not raised the new announcement with the court. Even if the court sides with the plaintiffs, the practical effect on the current process is uncertain and may depend on whether the plaintiffs and the court address the Division’s updated posture; to the extent they do, a ruling could require changes to the Division’s interim process before any formal rulemaking is adopted.