COURTS: SEC proxy access rule vacated

A SEC proxy access rule that would require public companies, including investment companies, to include shareholder director nomination…

A SEC proxy access rule that would require public companies, including investment companies, to include shareholder director nomination in proxy materials was thrown out by the U.S. Court of Appeals for the District of Columbia Circuit. In a unanimous decision, the three-judge panel ruled that the SEC had failed to consider the rule’s impact on “efficiency, competition and capital formation,” as the Securities Exchange Act of 1934 and the Investment Company Act of 1940 require it to do. Securities lawyers now say that the court’s request for more empirical and economic analysis could leave the rules set up by the Dodd-Frank financial reforms open to more challenges. See the court case here.