Summary

Situation Overview: In November 2025, the U.S. Securities & Exchange Commission’s (SEC) Division of Corporation Finance announced that, for the 2025–2026 proxy season, it will no longer issue substantive “no-action” letters for Rule 14a-8 exclusion requests except where the exclusion is based on the proposal being improper under state law.

What: Under the new framework, companies can exclude proposals based on their own analysis, so long as they notify the SEC staff and the proponent eighty calendar days before filing of proxy materials.

Who: Public companies.

In Depth

As part of this process, companies have the option to voluntarily seek a formal response from SEC staff. The SEC staff response is now limited to a letter stating that they will not object to the exclusion but will not assess the validity of the basis itself. The new framework gives companies greater discretion to exclude proposals without needing prior SEC staff approval.

Patomak is assisting companies as they consider what constitutes a “reasonable basis” and associated best practices under this new framework. While the SEC staff is not substantively opining on most exclusion requests, a company must still be able to show that it acted in good faith and documented a robust record that complies with Rule 14a-8.

Best practices depend on the particular facts and circumstances but generally include:

1. A well-developed record:
   1. A legal or compliance memorandum (internal or external counsel) covering what the proposal requests and key facts, the specific Rule 14a-8 exclusion, the basis for the exclusion, and business and/or operational implications of the proposal.
   2. A documented record of communications with the proponent, such as all correspondence.
   3. A review of potential litigation risk and proxy advisor positions.
2. A good faith review:
   1. A written summary outlining how the company evaluated the proposal covering, for example, internal assessments, and prior company action.
   2. Consistency with or deviations from past practice should be documented to support the determination.
   3. Internal governance approvals such as a review of written recommendations from counsel and management signoffs should be documented.
3. Written Rule 14a-8(j) notice:
   1. As noted above, written Rule 14a-8(j) notice is still required. The specific details of the notice will depend in part on whether or not the company is seeking a “no objections” response from the SEC staff.

As of January 30, 2026, the SEC staff has issued eighty-four formal responses. There have been no incoming no-action requests under 14a-8(i)(1) (improper under state law). Companies should continue to monitor this space. Shareholder Proposal Modernization is on the Commission’s policy agenda, and SEC Chairman Atkins has noted that he asked the SEC staff to “evaluate whether the Commission’s original rationale for adopting Rule 14a-8 in 1942 still applies today, especially in light of developments in the proxy solicitation process and shareholder communications generally over the last eighty plus years.”

Put Patomak’s Expertise to Work

Patomak can assist companies as they navigate these changes and encourages companies to consider the best practices noted above. Please contact Laura Magyar at lmagyar@patomak.com or Erica Bens at ebens@patomak.com if you have any questions or we can be of assistance.