After much debate and numerous counter offers, the conference committee working on the financial regulation reform bill finally reached agreement Thursday night to adopt the original Senate bill language on proxy access, with a modification requested by Sen. Mike Crapo (R-Idaho) that would allow the Securities & Exchange Commission to exempt small businesses from the requirement at its discretion.

Section 972 of the Senate bill reads: "The Commission may issue rules permitting the use by shareholders of proxy solicitation materials supplied by an issuer of securities for the purpose of nominating individuals to membership on the board of directors of the issuer, under such terms and conditions as the Commission determines are in the interests of shareholders and for the protection of investors."

Both chambers had previously passed measures affirming the Securities and Exchange Commission's authority to promulgate proxy access rules. However, there was a flurry of back-and-forth on the issue this week, after some lawmakers on the conference committee moved to strike the proxy access language from the bill altogether.

The debate led to numerous offers and counteroffers on both sides, including one by Senate Banking Committee Chairman Chris Dodd (D-Conn.) that would've required a minimum 5 percent ownership stake held for at least two years, and another by Senator Charles Schumer (D-N.Y.) that would have required a three percent ownership stake held for at least three years, with a shareholder required to hold their shares for a specified period afterward if their nominee won a seat on the board.

Meanwhile, the SEC proposed rulemaking last year that would grant limited access to the proxy for shareholders that own a 1 to 3 percent stake, depending on the company size, held for at least one year. The commission has delayed voting on the measure, presumably awaiting Congressional action to prevent a legal challenge of its authority to write a proxy access rule.

Meanwhile, lawmakers still have to reconcile remaining open provisions, including the details of the so-called Volcker Rule, which would ban proprietary trading by banks, and derivatives oversight. Once the conference committee reaches agreement on a final bill, it must still be voted on by both chambers, and then sent to the president for signature. Congressional leaders have said they want to complete their work on the bill so it can be signed before July 4. If the conference committee wraps up its negotiations tonight, the House could vote as soon as Tuesday.

Compliance Week will provide readers with full details on the bill in its June 29 edition.