SEC VOTES TO REOPEN PUBLIC COMMENT PERIOD ON UNIVERSAL PROXY CARD PROPOSAL

On April 16, 2021, the U.S. Securities and Exchange Commission (“SEC”) announced the reopening of the comment period relating to the SEC’s 2016 proposal for mandatory universal proxy cards.  The proposal seeks to amend the federal proxy rules to establish new procedures for the solicitation of proxies, the preparation and use of proxy cards, and the dissemination of information about all director nominees in contested elections.

The SEC is proposing the mandatory use of universal proxy cards for all non-exempt solicitations in connection with contested director elections, other than those involving registered investment companies and business development companies.  Currently, shareholders voting by proxy are generally limited to selecting director candidates nominated by the person soliciting the proxy.  However, shareholders who vote in person at shareholder meetings commonly cast votes through written ballots which include the names of all director nominees.  Thus, the SEC’s proposal seeks to align shareholders’ ability to vote for candidates irrespective of whether the vote is submitted in-person or by proxy.

According to Allison Herren Lee of the SEC, “[t]his is an important step toward finalizing rules that will facilitate clarity and efficiency for shareholders voting in director elections.”

The SEC’s full proposal can be found here.