SEC Amends Proxy Rules to Facilitate Electronic Forums
January 28, 2008
On January 18, 2008, the SEC adopted amendments to the proxy rules to facilitate electronic shareholder forums. The amendments clarify that participation in an electronic shareholder forum that could potentially constitute a solicitation subject to the proxy rules is exempt from most of the proxy rules if all of the conditions to the exemption are satisfied. The exemption will apply to any solicitation made in an electronic shareholder forum that is established, maintained or operated by a company, shareholder, or a third party acting on a company’s or shareholder’s behalf by or on behalf of any person who does not seek directly or indirectly, either on its own or another’s behalf, the power to act as proxy for a shareholder and does not furnish or otherwise request, or act on behalf of a person who furnishes or requests, a form of revocation, abstention, consent, or authorization. A solicitation on an electronic shareholder forum will be exempt so long as it occurs more than 60 days prior to the date announced by the company for its annual or special meeting of shareholders or, if the company announces the meeting less than 60 days before the meeting date, not more than two days following the company’s announcement. A person who participates in an electronic shareholder forum and makes solicitations in reliance on the Rule 14a-2(b)(6) exemption will be eligible to solicit proxies after the date that the exemption is no longer available, or is no longer being relied upon, provided that any such solicitation complies with Regulation 14A.
In addition, the amendments state that a shareholder, company, or third party acting on behalf of a shareholder or company that establishes, maintains or operates an electronic shareholder forum will not be liable under the federal securities laws for any statement or information provided by another person participating in the forum.
The SEC stated that it was adopting these amendments to remove the obstacles, real and perceived, to the continued experimentation with, and use of the Internet for, communication among shareholders, and between shareholders and companies.
The effective date of the amendments is February 25, 2008.
http://www.sec.gov/rules/final/2008/34-57172.pdf