Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, December 14, 2009

SEC Re-opens Comment Period for Shareholder Director Nomination Proposal

The SEC announced that it is re-opening the public comment period for its shareholder director nomination proposal to seek views on additional data and related analyses received by the Commission at or after the close of the original public comment period on August 17.  The SEC proposed changes to the federal proxy rules in June to facilitate the rights of shareholders to nominate directors on corporate boards.  In the release, the SEC specifically mentioned the following:

• Report on Effects of Proposed SEC Rule 14a-11 on Efficiency, Competitiveness and Capital Formation, in Support of Comments by Business Roundtable, NERA Economic Consulting (submitted on August 17, 2009 by the Business Roundtable);

•Why Did Some Banks Perform Better During the Credit Crisis? A Cross-Country Study of the Impact of Governance and Regulation, Andrea Beltratti and Rene M. Stulz (submitted on September 11, 2009 by the Business Roundtable);

The Limits of Private Ordering: Restrictions on Shareholders’ Ability to Initiate Governance Change and Distortions of the Shareholder Voting Process, The Corporate Library (submitted on November 18, 2009 by the Shareowner Education Network and the Council of Institutional Investors); and

• Supplemental analysis of share ownership and holding period patterns from Form 13F data by the Commission’s Division of Risk, Strategy, and Financial Innovation, dated November 24, 2009.


The SEC staff continues to expect to make a final recommendation to the Commission early next year.

In addition to re-opening the shareholder director nominations comment period, the Commission will consider final action Wednesday on its proposal to improve the disclosure of information that public companies provide to their shareholders in proxy statements. The proposed rules apply to executive compensation, qualifications of directors and nominees, and other proxy disclosures.

At its December 16 meeting, the Commission also will consider adopting proposed measures to strengthen safeguards of investor funds controlled by investment advisers.


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