The SEC Division of Corporate Finance (the "Division") revised its approach to no-action requests by companies wishing to exclude a shareholder's proposal from proxy statements.
According to the Division, beginning in the 2019-2020 shareholder proposal season, responses to no action requests from Exchange Act Rule 14a-8 ("Shareholder Proposals") may be provided orally. Going forward, a response letter will be provided only when the Division determines that a written answer would provide clarity to the market. The Division continues to recommend that companies submit an analysis by the board of directors when seeking to exclude a shareholder proposal from proxy materials.
The Division stated that companies should not interpret a declined request as an indication of whether or not the shareholder proposal should be included under Rule 14a-8. The Division reaffirmed that "parties may seek formal, binding adjudication on the merits of the issue in court."
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