SEC proposes rescinding rule on shareholder proposals

SEC Chairman Paul Atkins announced on Sept. 16 a proposal to rescind Rule 14a-8, ending the SEC's oversight of shareholder proposals at corporate meetings. The commission now has three Republican members and two vacant seats previously held by Democrats. It also proposed ending a rule that requires glossy annual reports duplicating Form 10-K information and shortening the broker search period from 20 business days to five. The changes face a public comment period and further SEC action. What is contested: Atkins said the SEC lacks statutory authority over shareholder voting and that states, including Texas offering favorable local incorporation terms, should govern the area. New York State Comptroller Thomas DiNapoli, who oversees state retirement funds, said the shareholder proposal process has for more than 80 years strengthened board oversight and fostered dialogue. He said the SEC "has chosen to allow corporate management to shield themselves from accountability."