SEC Bars Use of Exempt Solicitations for Most Shareholders
Statement For Immediate Release
Tool for providing information on shareholder proposals ended for shareholders holding less than $5 Million of a company’s shares.
Media Contact: Ryon Harms, [email protected], (310) 730-9407
EL CERRITO, CALIFORNIA – January 27, 2026 – The Securities and Exchange Commission’s recently issued guidance reversing its long-standing position allowing Notices of Exempt Solicitation for smaller shareholders represents a significant setback for shareholder democracy and informed capital markets.
For decades, the SEC has allowed shareholders with less than $5 million in holdings to post an “exempt solicitation,” a memo on the SEC’s Edgar system providing other shareholders with explanatory information related to shareholder proposals. These memos ensure that investors have access to relevant information to inform upcoming votes. By unilaterally withdrawing this provision—without public notice, rulemaking, or shareholder input—the SEC is narrowing the flow of material information shareholders rely on prior to a vote, the time when investor engagement and transparency are most needed.
Andy Behar, CEO of As You Sow, said: “Communications on material issues central to informed investor decision making is the underpinning of our free market system. Restricting exempt solicitations to the few largest investors harms the core tenets of capitalism — information and trust between corporations and their beneficial owners. This policy should concern all shareholders. The SEC, acting unilaterally, and without public or shareholder input, to rescind such an essential right is a continuation of this administration’s attempt to drive the capital out of capitalism.”
The SEC’s action harms proponents who rely on this low-cost, transparent communication tool to engage fellow investors. Limiting exempt solicitations to only the largest shareholders entrenches power, raises barriers to participation, and undermines the purpose of the proxy system itself: enabling informed decision-making by beneficial owners. Rather than protecting markets, this policy risks chilling legitimate shareholder speech and weakens the fundamentals of a strong market.
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As You Sow is the nation’s leading shareholder representative, with a 30+ year track record promoting environmental and social corporate responsibility. As You Sow addresses a range of issues that affect shareholder value including climate change, ocean plastics, toxins in the food system, biodiversity, racial justice, and workplace diversity. See As You Sow's shareholder resolution tracker.