SEC Grants Stay of Proxy Access

On Sept. 29 Business Roundtable and the US Chamber of Commerce filed a legal challenge to the SEC's final rules on proxy access and requested the SEC stay the effectiveness of those rules.  On October 4, the SEC granted that stay.

Excerpted from the Commission's Order:
The Commission has discretion to grant a stay of its rules pending judicial review if it finds that “justice so requires.” Without addressing the merits of petitioners’challenge to the rules, the Commission has determined to exercise its discretion to stay Rule 14a-11 and related amendments to the Commission’s rules, including the
amendment to Rule 14a-8, pending resolution of petitioners’ petition for review by the Court of Appeals.

The Commission finds that, under all of the circumstances of this matter, a stay of Rule 14a-11 and related rule amendments is consistent with what justice requires. Among other things, a stay avoids potentially unnecessary costs, regulatory uncertainty, and disruption that could occur if the rules were to become effective during the pendency of a challenge to their validity. Because the Commission and petitioners will seek expedited review of petitioners’ challenge, questions about the rules’ validity will be resolved as quickly as possible.

The Commission further finds that, under all of the circumstances of this matter, it is consistent with what  justice requires to stay the effectiveness of the amendment to Rule 14a-8 adopted contemporaneously with Rule 14a-11 because the amendment to Rule 14a-8 was designed to complement Rule 14a-11 and is intertwined, and there is a potential for confusion if the amendment to Rule 14a-8 were to become effective while Rule 14a-11 is stayed.

Accordingly, it is ORDERED, pursuant to Exchange Act Section 25(c)(2) and Administrative Procedure Act Section 705, that the motion of petitioners filed on September 29, 2010 for a stay of the effect of Commission Rule 14a-11 and related amendments pending resolution of petitioners’ petition for review by the Court of
Appeals be, and hereby is, granted; and it is further

ORDERED, pursuant to Exchange Act Section 25(c)(2) and Administrative Procedure Act Section 705, that the amendment to Commission Rule 14a-8 adopted on August 25, 2010 is stayed pending resolution of petitioners’ petition for review by the Court of Appeals.