Monday, October 5, 2009

Finalization of Proxy Access Rules Will Be 'As Soon As Practicable,' Gillan Tells Investor Advisory Committee

In remarks at the SEC Investor Advisory Committee meeting taking place earlier today, SEC Deputy Chief of Staff Kayla Gillan commented on the status of SEC's initiatives on proxy access (aka shareholder nomination of directors).

Her remarks and those of Commissioner Elisse Walter and Commissioner Luis Aguilar appeared to have been made in part in response to recent press stories concerning when the SEC may act on finalizing the proposed proxy access rule(s) issued earlier this year. (See, e.g. this post from earlier today in, linking to this Oct. 2 Bloomberg article , Oct. 3 WSJ article, and Oct. 2 NYT article.)

Gillan noted: "The Commission never announced any date it would make these rules; staff ... know[s] this is an important issue... we received over 500 comment letters, most were well over 100 pages each... over 100 questions were asked in the Release, very detailed responses, staff has an obligation and the Commission has an obligation when it adopts rules to consciensciously consider all comments, that takes time… [we] will bring final rules as soon as practicable."

Commissioner Walter added: "There was a sense out there in some quarters that the Commission was going to act so final rules would be adopted before the start of the next proxy season; for myself and the Commissioner to my right [Aguilar], we both would have [wanted that to happen] … [but] we will not sacrifice excellence to speed."

Commissioner Aguilar said: "I was hopeful we would do it this year, but there is something to be said for doing it right, not in a hurry; I am still an optimist, the year is still ticking, I know what I read in the press last week, nobody asked me my thoughts before [that] went into the press."

Ann Yerger of the Council of Institutional Investors, a member of the SEC IAC, said, "We would prefer to see a workable strong rule."Later in the meeting, Gillan noted: "There is a question about even how soon an amendment to Rule 14a-8 can be effected and implemented."

Commissioner Walter observed there are considerations with respect to Rule 14a-8 and Rule14a-11, noting: "I don’t think I fix this as my position, [but] I think better to join them together ... an approach like 14a-11 is very important to put on the table, I worry about what moving ahead with 14a8 will do to public discussion about 14a-11 and whether it could retard that going into effect."Commissioner Aguilar added, "Part of the answer, we alluded to earlier, it is important we get this right… (our) process is designed to get a lot of informed commentary from a lot of informed people."

NOTE: This blog post is based on information discussed during the beginning of SEC's Oct. 5 Investor Advisory Committee (IAC) meeting; further information may have been presented later in the meeting. The IAC subcommitees are holding closed working sessions during their lunch break, and are set to reconvene in public session to present a summary of their deliberations at approximately 2:15 today.

See also our separate blog post for information on the SEC's draft strategic plan presented to the Investor Advisory Committee earlier today.

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