In Historic Rulemaking, SEC Allows Investors to Access Proxies to Nominate Directors

In a historic vote, the Securities and Exchange Commission Aug. 25 approved controversial rule amendments to facilitate the rights of shareholders under state law to nominate corporate directors.

The new amendments, which are likely to face legal challenges, allow shareholders, individually or in a group, to have their director candidates included in corporate proxy materials if the shareholders continuously owned at least 3 percent of a public company’s voting stock over the last three years. Smaller issuers are exempt from the rules’ application for three years.

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