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SEC Retreats on Proxy Access No-Action Letters

Joe Mont | January 20, 2015

In a surprise move by the Securities and Exchange Commission—and one it apparently knew would be controversial given its announcement at 5:30 p.m. on the Friday before a three-day weekend—the Division of Corporation Finance has reversed itself on an earlier no-action letter that allowed Whole Foods to replace a shareholder proposal for proxy access with one of its own.

A Jan.16 statement by CorpFin explains that a directive from SEC Chairman Mary Jo White demanded that it review the current Exchange Act rule for excluding conflicting proxy proposals “due to questions that have arisen about the proper scope and application.” Staff will review the rule and report back to the commissioners. CorpFin “will express no views on the application of [the rule] during the current proxy season.”

The Whole Foods matter involved dueling proposals to let shareholders place...

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