Letter to the SEC on Shareholder Proposals Charges the Commission with Improper Exclusion of Evidence

A group of investors including the Council of Institutional Investors, ICCR, SIF, CERES, and PRI have written a very powerful letter to the SEC about the proposed rule on shareholder proposals, which is supposed to be voted on this month. The letter accuses the Commission of not allowing an adequate basis for comment on the proposal because key evidence in the record was withheld from public disclosure. The full letter is below. An excerpt:

We write now because we are troubled by the 11th-hour submission by the Chief Economist of the Commission’s Division of Economic and Risk Analysis (“DERA”), on August 14, long after the February 3, 2020, public comment deadline, of the staff’s analysis of previously undisclosed data that is material to the public’s understanding of their predicted impact.1 The August 14 DERA Memo indicates that the Commission has been in possession of the data since at least August 2019 and that DERA staff had used the data to estimate the impact of the proposed amendments before the Commission voted to propose them. Yet the data and the staff’s analysis were held back from the Release accompanying the proposed amendments and not released until the Commission announced that it is prepared to vote on final changes to Rule 14a-8, without an opportunity for public comment. We ask that the Commission re-open the comment period to provide the public a meaningful opportunity to address the data.

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