A Big Day in SEC Rulemaking

Sep 24, 2020

By George Wilson

On September 23, 2020, the SEC adopted two major Final Rules dealing with two very different issues, shareholder proposals and the whistleblower program.

Shareholder Proposals

The Commission approved changes in its rules for shareholder proposals in three areas.

First, the ownership thresholds for submission of shareholder proposals have been increased to:

  • $2,000 of the company’s securities for at least three years;
  • $15,000 of the company’s securities for at least two years; or
  • $25,000 of the company’s securities for at least one year.

Second, shareholders will no longer be permitted to aggregate holdings to meet the ownership thresholds.

Third, the voting thresholds for resubmission of a proposal have been increased from 3%, 6% and 10% for matters previously voted on once, twice or three or more times in the last five years to thresholds of 5%, 15% and 25% for those respective periods.

You can read more in this Press Release and the Final Rule.  The new shareholder proposal rules will be effective 60 days after publication in the Federal Register.

Whistleblower Program Changes

The commission made numerous changes in its whistleblower program rules affecting areas ranging from increasing efficiencies in how claims are processed to providing the Commission tools to provide rewards appropriate to the nature of a whistleblower’s efforts and contributions.  You can read more in this press release which contains a link to the Final Rule.

Along with the new rules, the Office of the Whistleblower has issued new guidance about how awards are determined which you can read here.

The new whistleblower rules will be effective 30 days after publication in the Federal Register.

As always, your thoughts and comments are welcome!


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