ANALYSIS: Is the No-Action Letter Process on Its Way Out?

US companies have included an impressive 608 shareholder proposals in their definitive proxy statements so far this year.

One explanation for this high count is that companies are taking a step back from the no-action letters—a process companies typically use to obtain SEC feedback on whether they may keep proposals out of their proxy statements under Rule 14a-8.

No-Action Letter Process

There are 13 substantive grounds for companies to exclude a shareholder proposal from their proxy statement under Rule 14a-8. The substantive grounds of exclusion most frequently mentioned in no-action letter correspondence are management functions (14a-8(i)(7)), substantially implemented ...