Tuesday, October 5, 2010

Staid SEC Grants Stay on Proxy Access Rule

As helpfully detailed in today’s post by Broc Romanek in TheCorporateCounsel.net blog, the SEC yesterday granted a stay on its amendment to its proxy rules (Rule 14a-11 and 14a-8) which would have otherwise been effective for the 2011 proxy season. Romanek notes the SEC took this action after the U.S. Chamber of Commerce and the Business Roundtable filed a legal challenge to the SEC rule.

“A Stay Is Consistent With What Justice Requires”
The SEC, in taking a staid or conservative position (i.e. in the apolitical sense) in this matter, noted in yesterday’s Order:

“The Commission finds that, under all of the circumstances of this matter, a stay of Rule 14a-11 and related rule amendments is consistent with what justice requires. Among other things, a stay avoids potentially unnecessary costs, regulatory uncertainty, and disruption that could occur if the rules were to become effective during the pendency of a challenge to their validity. Because the Commission and petitioners will seek expedited review of petitioners’ challenge, questions about the rules’ validity will be resolved as quickly as possible.”
Additionally, as pointed out by Romanek in his post today:
“The SEC said it decided to delay the implementation of [Rule 14a-8 as well], because the amendment to Rule 14a-8 was designed to complement Rule 14a-11 and is intertwined, and there is a potential for confusion if the amendment to Rule 14a-8 were to become effective while Rule 14a-11 is stayed.’"
Chamber, Business Roundtable Commend SEC for Granting the Stay
In a press release issued following the SEC's action, the Chamber and Business Roundtable "Commend[ed the] SEC's Decision to Grant a Stay on [the] Proxy Access Rule."

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1 comment:

Government Grants said...

My understanding is that a beta test of the process is in the works, and they will select a standard or two in very near future. I don’t intend to rely on that function