SEC's New Proxy Access Rules Not Ready for 2010 Proxy Season

Last spring, the SEC proposed a set of proxy rule amendments that would permit shareholders a voice in the nomination of company directors. The so-called "direct access proposal" would require public companies to include in their proxy materials both (a) director candidates nominated by shareholders who meet certain criteria and (b) shareholder proposals that bear on proxy-related issues in a company's governing documents. At the time, the Commission's intention was for the new rules to be in force by the beginning of the upcoming proxy season.

According to a recent speech by Commissioner Walter, however, the new rules will not be adopted by an enacting release until sometime in 2010 - obviously too late for the 2010 proxy season. Her speech, entitled SEC Rulemaking - Advancing the Law to Protect Investors, is available here.

Commissioner Walter "believe[s] the Commission should continue on its path toward renewed investor confidence and restored market stature and continue to take the necessary steps to advance the law concerning some difficult and long-standing issues, particularly in the areas of corporate governance and disclosure." And while she "believe[s] that the SEC is doing just that[,]" it is a disappointment that the proxy rule amendments - as obvious, straightforward, and badly-needed as they are - continue to meet with delay.