Republicans that serve on the House Financial Services Committee commended the Securities and Exchange Commission (SEC) for its recent decision to rescind Staff Legal Bulletin (SLB) No. 14L.
Staff Legal Bulletin (SLB) No. 14L was put in place back in 2021 to provide guidance on shareholder proposals. Along with looking at the impact on business operations, the bulletin also encouraged proposals to include the broader social impact.
“The SEC’s core mission is to protect investors, maintain fair and efficient markets, and facilitate capital formation. The recent rescission of SLB 14L is a commendable action aligned with this mission,” the House Financial Services Republicans wrote in a letter to acting SEC Chair Mark Uyeda. “We encourage the Commission to build upon this progress by pursuing further reforms to Rule 14a-8 that will promote a shareholder proposal process that is both fair and focused on enhancing long-term shareholder value.”
The letter was signed by Committee Chairman Rep. French Hill (R-AR), along with Rep. Ann Wagner (R-MO), chair of the Subcommittee on Capital Markets, and all Republican members of the Subcommittee on Capital Markets.
“However, despite this positive development, challenges remain within the Rule 14a-8 framework. The politicization of the proxy process continues to place a substantial burden on public companies, drive up unnecessary costs for shareholders, and undermine the broader attractiveness of U.S. public markets,” they wrote. “When shareholder proposals are driven by social and political agendas rather than issues directly tied to corporate performance, they erode investor confidence and divert resources away from long-term value creation. This not only harms the companies targeted but also retail investors, pension funds, and other market participants who rely on fair and efficient capital markets.”
The lawmakers urged the SEC to undertake a formal rulemaking to restore the shareholder proposal rule’s original intent by keeping politics out of proxy statements; eliminate the significant policy exception; increase resubmission thresholds; nhance oversight of proxy advisory firms; and end robovoting practices.
“The SEC’s recent actions are a step in the right direction, but the Commission must build on this momentum by implementing durable, substantive reforms through formal rulemaking. Ensuring that the proxy process serves the interests of all shareholders—not just a vocal minority with political agendas—is critical to maintaining the integrity and competitiveness of U.S. capital markets and supporting long-term value creation. Political debates should be left to Congress, not corporate proxy statements,” they added.