SEC Provides Guidance for Issuers Holding Annual Meetings during COVID-19 Pandemic

The SEC Division of Corporation Finance and Division of Investment Management provided relief for market participants affected by COVID-19 who may have difficulties complying with federal proxy rules.

The SEC provided the following guidance for issuers with proxy authority from shareholders in light of the COVID-19 pandemic.

  • Annual Meeting. Even if an issuer has mailed and filed its proxy materials, it can change the date, time or location of its annual meeting without mailing or filing additional documents if it (i) issues a press release detailing the changes, (ii) files the announcement on EDGAR, and (iii) tries to inform all relevant parties in the proxy process of the event changes.

  • "Virtual" Shareholder Meetings. If an issuer plans to hold a "virtual" or "hybrid" shareholder meeting, the SEC expects the issuer to provide the necessary logistical details (e.g., how to access the meeting remotely or how to submit a vote).

  • Presentation of Shareholder Proposals. In the event that a shareholder proponent for a proxy is unable to attend the annual meeting, the SEC urged issuers to allow the proponent to explain its proposal by remote communication. Additionally, the SEC stated that if a shareholder proponent is unable to attend the meeting due to COVID-19-related reasons, it would be considered a "good cause" under SEC Rule 14a-8(h) ("Shareholder proposals").

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