On September 16, 2026, the Securities and Exchange Commission (SEC) issued two proposals that, if adopted, would represent significant changes to the federal proxy rules for U.S. public companies. The first proposal would eliminate Rule 14a-8 under the Securities Exchange Act of 1934 (Exchange Act). Rule 14a-8 currently requires companies to include qualifying shareholder proposals in their proxy materials and has been part of the federal proxy rules for more than 80 years. The proposal would also give companies greater discretion to vote proxies on shareholder proposals that are not included in their proxy materials. The second proposal is more practical – it would update several requirements that the SEC views as outdated in light of EDGAR and modern electronic communications. Most notably, it would eliminate the obligation to deliver a separate annual report to shareholders and shorten the minimum broker search period from 20 business days to 5 business days before the record date for a shareholder meeting. The public comment period for these proposals will remain open for 60 days following publication in the Federal Register, following which the SEC may approve, modify or abandon the proposed changes. Thus, until any changes are adopted, companies should plan for the 2027 proxy season under the current rules. Rescission of Rule 14a-8 Rule 14a-8, written in a Q&A format, requires shareholders to include certain shareholder proposals in company proxy statements, subject to a list of allowed exclusions, which are often the subject of dispute between companies and the proponents. If Rule 14a-8 is rescinded, federal law would no longer determine which shareholder proposals a company must include in its proxy materials. That question would be left to the law of the company's state of incorporation and, where state law allows, to the company's charter and bylaws. The SEC's main argument is that it lacks the authority to regulate this area. In its view, Section 14(a) of the Exchange Act allows the SEC to regulate how proxies are solicited and what shareholders must be told. It does not allow the SEC to decide which matters shareholders are entitled to vote on, which is a question of state corporate law. The SEC also offers policy reasons, notably the rising costs of the process for companies and the fact that most proposals receive little shareholder support. It also notes that a small group of repeat proponents accounts for most submissions. Finally, it says the federal rule has discouraged states from developing their own approach to shareholder proposals. This proposal is a continuation of a process in which the SEC staff has largely stopped reviewing company requests to exclude shareholder proposals over the past year. Even if the SEC will rescind the rule, shareholder proposals will not disappear. Proponents are likely to submit proposals directly under state law and company advance notice bylaws, commonly called "floor proposals". Most state statutes and company governing documents say very little about these proposals, including whether they must appear in the company's proxy materials. We expect states, and eventually companies, to fill that gap. Amendments to Rule 14a-4(c) Under the current rules, a shareholder can prevent a company from voting proxies at its discretion on a floor proposal. To do so, the shareholder sends its own proxy materials to shareholders who carry enough shares to pass the proposal. As a result, companies often feel they have no choice but to include these proposals on their own proxy card so that they can counteract the proponents’ proxies. Under the proposed amendments, a company could leave a timely submitted floor proposal off its proxy card and still vote the proxies it receives on that proposal, provided that it: summarizes the proposal in its proxy statement, together with the way it plans to vote the proxies; directs shareholders, on the proxy card, to that summary in the proxy statement; and gives each shareholder the option, through a box on the proxy card, to deny the company discretionary authority over its shares. One check box may cover all such proposals, although companies may choose to offer a separate box for each one. The practical result is that each shareholder, rather than the proponent, decides whether the company may vote that shareholder’s shares on the proposal. The SEC has stated it could adopt this change even if it keeps Rule 14a-8. Modernization of the Proxy Solicitation Rules The second proposal would: end the requirement to deliver or make available an annual report to shareholders, so that a proxy or information statement for a meeting at which directors are elected would only need to follow the filing of the company's Form 10-K (or an annual report furnished on EDGAR). The required contents of an annual report to shareholders substantially overlap with the required contents for an annual report on Form 10-K. Eliminating the annual report to shareholders as a separate required document would save companies preparation time and printing, mailing and webhosting costs; eliminate the stock performance graph requirement, except for investment companies. This currently required graph (other than for smaller reporting companies) illustrates the performance of an investment in the company’s stock over 5 years as compared to certain relevant stock indices. Eliminating the graph would save companies the time and costs of preparing such a graph while at the same time investors can readily obtain such information elsewhere; remove the 20-business-day advance delivery requirement for proxy statements that incorporate information by reference, with parallel changes to Forms S-4 and F-4. Shareholders can readily find incorporated documents without such advance notice - though many companies do not incorporate by reference into their proxy statements, this change could lead to shorter timing to plan shareholder meetings for those that do; eliminate Notices of Exempt Solicitation, both required and voluntary. This filing currently requires certain large shareholders to file a notice if they conduct certain written exempt proxy solicitations; shorten the minimum broker search period from 20 business days to five business days before the record date for a shareholder meeting. Companies are required under the proxy rules to ask record holders for the number of proxy materials needed by the record holders to forward to customers who are beneficial owners of the company. As a practical matter, this “broker search” typically takes only a couple of days so the 20 business day lead time has become outdated; and require contact details for a company representative on the cover page of Schedules 14A and 14C. The broker search and delivery changes would allow companies to hold shareholder meetings on a shorter timeline. What Companies Should Do Now Companies subject to the U.S. proxy rules should: handle shareholder proposals for the 2027 proxy season under the current Rule 14a-8; review their advance notice bylaws and the rules of their state of incorporation on floor proposals; follow legislative developments, particularly in popular states of incorporation like Delaware, Nevada and Texas, before amending their governing documents; consider how the shorter broker search period and the removal of the 20-business-day delivery requirement could affect their meeting timelines; discuss the new proxy card check box and the shorter timelines with their proxy solicitor and transfer agent; and consider submitting comments to the SEC. * * * * * * * * If you would like further information regarding the SEC proposals discussed in this Client Alert or related shareholder proposal or proxy statement matters, please contact the lawyer at Sullivan & Worcester LLP with whom you regularly consult, or any of the lawyers listed above. This Client Alert is provided for general informational purposes only and does not constitute legal advice.

On August 14, 2026, the Securities and Exchange Commission (SEC) approved proposed rule changes by the New York Stock Exchange LLC (NYSE) and NYSE American LLC (NYSE American) to adopt a new continued listing requirement imposing a minimum trading price of $0.25 per share. This approval follows the SEC’s recent approval of Nasdaq’s new $5 million Market Value of Listed Securities continued listing requirement and reflects a broader trend by the national securities exchanges to tighten continued listing standards for very low-priced and low-market-capitalization issuers.1 Effective July 1, 2027, the new rules are expected to have a particularly significant impact on micro-cap, small-cap and development-stage public companies. Beginning on that date, a NYSE or NYSE American listed security that closes below $0.25 per share on any trading day will be subject to immediate trading suspension and delisting. Overview of the New Requirement Under the approved rules, NYSE and NYSE American will be required to take immediate delisting action if a listed security closes below $0.25 per share on any trading day. This represents a significant change from the exchanges’ historical approach to low-price continued listing deficiencies. For NYSE issuers, the rule amends Section 802.01C of the NYSE Listed Company Manual. For NYSE American issuers, the rule amends Section 1003 of the NYSE American Company Guide. If a security closes below $0.25 per share: the applicable exchange will immediately suspend trading; the exchange will commence delisting proceedings; the issuer will not be eligible to submit a compliance plan or receive a cure period for that deficiency; and the issuer may appeal the delisting determination in accordance with the applicable exchange rules. This represents a significant departure from the traditional approach to many continued listing deficiencies, which often provide issuers with a period to regain compliance while remaining listed. SEC’s Rationale for Approval The SEC approved the rules on an accelerated basis after considering comments from market participants and the exchanges’ stated concerns regarding very low-priced securities. The exchanges argued that securities trading at extremely low prices may be more susceptible to volatility and market manipulation and may raise concerns regarding the maintenance of fair and orderly markets. The SEC agreed that the rules are reasonably designed to address investor protection and market integrity concerns. In its analysis, the SEC noted that securities falling below the $0.25 threshold historically showed a significant likelihood of continuing to trade below that level and, in many cases, were later delisted for other quantitative continued listing deficiencies. At the same time, the SEC acknowledged comments raising concerns that an automatic suspension and delisting trigger could affect issuers experiencing temporary market dislocation or short-term trading pressure. The SEC nevertheless concluded that the delayed effective date and the exchanges’ continuing appeal procedures supported approval. Practical Impact for Listed Companies The new minimum trading price requirement creates a material compliance consideration for NYSE and NYSE American issuers, particularly micro-cap, small-cap, development-stage and capital-intensive companies whose securities trade near or below $1.00 per share. Unlike NYSE’s existing $1.00 average closing price requirement and Nasdaq’s existing $1.00 minimum bid price requirement, both of which generally provide issuers with a period to regain compliance, the new NYSE and NYSE American $0.25 threshold provides no cure period before suspension and delisting proceedings are initiated. NYSE or NYSE American listed issuers should also consider the rule together with other exchange requirements and limitations, including rules relating to reverse stock splits, market capitalization, stockholders’ equity, market value of publicly held shares, public float and shareholder approval requirements. For many smaller issuers, addressing minimum trading price concerns may require advance planning and should not be left until the issuer is already approaching the $0.25 threshold. What Public Companies Should Do Now NYSE and NYSE American listed issuers whose securities trade at low prices should evaluate the potential impact of the new rule before the effective date. Companies should consider: monitoring closing trading prices on an ongoing basis, and reviewing exchange compliance holistically, including market capitalization, equity, and public float requirements; assessing whether the company may be at risk of approaching the $0.25 threshold; evaluating timing and corporate approvals for a potential reverse stock split; considering capital raising or strategic alternatives where appropriate; and developing contingency plans in the event the company’s trading price deteriorates, including considering the potential consequences of a trading suspension, delisting and a possible transition to the OTC market. The delayed effective date of July 1, 2027 is intended to provide affected issuers with time to take proactive steps, including by seeking shareholder approval for a reverse stock split where required. Once effective, however, the rule will not provide for a traditional compliance plan or cure period. * * * * * * * * If you would like further information regarding the new listing standards discussed in this Client Alert or related exchange compliance matters, please contact the lawyer at Sullivan & Worcester LLP with whom you regularly consult, or any of the lawyers listed above. This Client Alert is provided for general informational purposes only and does not constitute legal advice. 1 The SEC’s July 22, 2026 approval of Nasdaq’s $5 million Market Value of Listed Securities continued listing requirement is currently stayed pending further Commission review. For additional information, see Sullivan & Worcester LLP, SEC Stays Approval of Nasdaq’s $5 Million MVLS Continued Listing Requirement Pending Commission Review (August 3, 2026).