SEC Releases Staff Legal Bulletin 14M

The SEC’s Division of Corporation Finance (the “Division”) has released Staff Legal Bulletin (SLB) 14M as part of its continuing effort “to provide guidance on important issues” under Rule 14a-8 of the Securities Exchange Act of 1934. Rule 14a-8 permits companies to omit shareholder proposals from their proxy statements when the proposals concern the companies’ “ordinary business operations.”

Specifically, SLB 14M rescinds the previous interpretive guidance in SLB 14L (released in November 2021), under which the determination of whether a shareholder proposal is significant enough to be included in a company’s proxy statement would not be confined to the company’s own circumstances but would extend to a consideration of whether an issue has a significant social impact. SLB 14M would revert to views expressed in certain SLBs before SLB 14L, emphasizing that a company’s own “facts and circumstances” should be the key factor in the determination of whether a particular shareholder proposal should be excluded.

Note that SLBs constitute the Division’s views but do not carry legal force and are not rules or regulations of the SEC.