SEC Pauses Substantive Responses to Most Shareholder Proposal No-Action Requests

On November 17, 2025, the SEC’s Division of Corporation Finance (the “Division”) announced that it will pause providing substantive responses to most shareholder-proposal no-action requests under Rule 14a-8 of the Exchange Act of 1934, as amended (the “Exchange Act”). The announcement applies to the current proxy season (October 1, 2025–September 30, 2026) as well as to no-action requests received before October 1, 2025 to which the Division has not yet responded. The Division will continue to respond substantively to no-action requests related to Rule 14a-8(i)(1) due to “recent developments regarding the application of state law and Rule 14a-8(i)(1) to precatory proposals.” A no-action request seeking to exclude a shareholder proposal under this rule must include “a supporting opinion of counsel” that the proposal is not proper under the applicable state law.

Companies that intend to exclude Rule 14a-8 shareholder proposals must still notify the SEC and proponents no later than 80 calendar days before filing a definitive proxy statement; however, the notification requirement is informational only. Companies seeking to exclude Rule 14a-8 shareholder proposals may request SEC acknowledgment by submitting a Rule 14a-8(j) notice with an unqualified representation that they have a reasonable basis for exclusion under Rule 14a-8, prior guidance, or case law. The procedures for submitting notices or requests to the Division pursuant to Rule 14a-8(j) remain unchanged; such submissions should continue to be made through the SEC’s Shareholder Proposal Form. The Division will then issue a letter stating that, based solely on the company’s representation, it will not object to the omission, but it will not assess the merits of the exclusion. The Division noted that the absence of a prior response concurring with a basis for exclusion or a prior response indicating that the Staff could not concur with a basis for exclusion does not prevent companies from determining that they have a reasonable basis to exclude the same or a similar proposal.

The SEC has indicated that it intends to review Rule 14a-8 generally and, in doing so, will take into account the impact of the recent announcement on the 2026 proxy season. This announcement is consistent with broader signals from the Staff and with the SEC’s Spring Regulatory Flexibility Agenda, which contemplates amendments to Rule 14a-8 designed to “reduce compliance burdens for registrants and account for developments since the rule was last amended.”

For more information, see the SEC’s Announcement and Debevoise Debrief.

2026 SEC Division of Examinations Priorities

On November 17, 2025, the SEC Division of Examinations (the “Division of Examinations”) released its 2026 Examination Priorities (the “Priorities”). The Priorities continue to emphasize long-standing themes such as fiduciary duties for investment advisers, compliance program effectiveness, and retail investor protection, while providing insight into how the Division of Examinations is approaching certain investment products and risk areas under the new administration of SEC Chairman Paul Atkins. For example, crypto assets are excluded from the Priorities for the first time since 2018, signaling the current administration’s support for innovation in this asset class. Conversely, the Priorities continue to focus on private fund advisers, including a focus on private credit, although the private fund priorities are folded into thematic review areas rather than appearing in a standalone section.

Highlights from the Priorities include:

• Investment Advisers. The Priorities reinforce the SEC’s continued focus on adherence to advisers’ fiduciary duties, with particular emphasis on aspects of their business that serve retail investors. The Priorities also reiterate that assessment of advisers’ compliance programs is a fundamental part of the examination process. Examinations will focus on whether policies and procedures address fee-related conflicts, particularly those that arise from account and product compensation structures.

• Investment Companies. The Division of Examinations will examine fund fees and expenses and portfolio management practices and disclosures for consistency with filings, marketing materials, and the amended fund “Names Rule.” The Priorities also highlight certain developing areas of interest, including use of complex strategies and/or holding significantly less liquid or illiquid investments, employment of novel strategies and investments (with an apparent focus on leverage vulnerabilities) and participation in mergers or similar transactions, particularly where there may be associated operational and compliance challenges.

• Broker-Dealers. The Priorities underscore the Division of Examination’s broad review of broker-dealer practices. The Priorities continue to emphasize compliance with the net capital rule and the customer protection rule, including reviewing the timeliness of financial notifications and other required filings. The Division of Examinations continues to prioritize scrutiny of broker-dealer equity and fixed income trading practices, emphasizing those associated with extended-hours trading, municipal securities, order priority, and mark-ups disclosure. As in the 2025 cycle, the Division of Examinations will evaluate broker-dealer sales practices relating to retail products and Regulation Best Interest. Similar to the priorities with respect to investment advisers, examinations of broker-dealers will also focus on dual registrants and the firms’ processes for identifying and mitigating conflicts of interest.

• Self-Regulatory Organizations and Clearing Agencies. As in prior years, the Division of Examinations will examine national securities exchanges, the Financial Industry Regulatory Authority and the Municipal Securities Rulemaking Board, with an emphasis on regulatory programs, market integrity, and participation in National Market System Plans.

• Other Market Participants. The SEC will continue to assess municipal advisor compliance with MSRB Rule G-42, particularly as it relates to conflicts disclosures and documentation of advisory engagements. Examinations of transfer agents will remain focused on the same areas outlined in the 2025 Priorities, with the addition of evaluating compliance with the 2024 amendments to Regulation S-P. The SEC will focus on funding portal arrangements with third parties regarding the maintenance and transmission of investor funds, compliance with federal securities laws, and evaluating compliance with the 2024 amendments to Regulation S-P. The Priorities reiterate a focus on security-based swap dealers’ compliance with Regulation SBSR’s reporting requirements to accurately report security-based swap transactions to security-based swap data repositories. The SEC expects to begin conducting examinations of registered security-based swap execution facilities, with a focus on risk analysis and trade monitoring.

The Priorities also highlight risks impacting various market participants, including those related to emerging issues in technology and cybersecurity. The Priorities expand the SEC’s focus on the use of AI in registrant operations, particularly in connection with automated investment advisory services, recommendations, and related tools. With respect to compliance risks, the Priorities focus on policies and procedures related to incident response and third-party vendor risk management and reiterate the focus from previous years on anti-money laundering programs to ensure compliance with the Bank Secrecy Act.

For more information, see SEC Examination Priorities and Debevoise in Depth.

U.S. Federal Appeals Court Halts California’s Climate Disclosure Law

On November 18, 2025, the U.S. Court of Appeals for the Ninth Circuit issued an order in U.S. Chamber of Commerce v. Randolph granting an injunction pending appeal against enforcement of the Climate-Related Financial Risk Act (“SB 261”). SB 261 requires companies “doing business in California” with over $500 million in revenue to publicly disclose their climate-related financial risks in a biennial report. Under the statute, the first reports are due on January 1, 2026.

As a result of the injunction, covered companies are no longer under an immediate legal obligation to comply with SB 261’s deadline. However, entities preparing to report under SB 261 should continue to plan for compliance. It is possible that the court could render a decision on the appeal against the plaintiffs early in the new year and subsequently lift the injunction. If that occurs, companies may need to comply with SB 261 shortly thereafter.

On December 1, 2025, the California Air Resources Board (“CARB”) issued an enforcement advisory explaining that it will not enforce SB 261 against companies that miss the January 1, 2026 reporting deadline. CARB will provide additional guidance after the appeal concludes. Covered entities may voluntarily submit SB 261 reports through CARB’s now-open public docket.

For more information, see Debevoise Debrief and CARB Enforcement Advisory. For more on California’s Climate Disclosure Laws, see Debevoise Update and Debevoise Debrief on the August CARB workshop.

SEC Drops Remaining Cybersecurity Charges Against SolarWinds and Its CISO

On November 20, 2025, the SEC voluntarily dismissed its enforcement case against SolarWinds and its Chief Information Security Officer (“CISO”), a case stemming from the 2020 SUNBURST cyberattack. The original complaint was filed in October 2023 in the Southern District of New York (“SDNY”), and the SEC filed an amended complaint in February 2024. The SEC charged SolarWinds and its CISO with violations of the anti-fraud provisions of the federal securities laws in connection with alleged disclosure and internal controls violations related both to the cyberattack and to alleged undisclosed weaknesses in SolarWinds’ cybersecurity program dating back to 2018. This was the first time the SEC brought civil fraud claims in federal court against a public company that suffered a cyberattack and the first time the SEC charged a CISO in connection with alleged violations of the federal securities laws occurring within the scope of the CISO’s cybersecurity functions.

In July 2024, Judge Engelmayer of the SDNY dismissed nearly all of the SEC’s claims, finding that they did not plausibly plead actionable deficiencies in SolarWinds’ reporting of the cyberattack and relied on hindsight and speculation, and that the cybersecurity controls at issue in the suit, such as password and virtual private network protocols, are “outside the scope” of the internal accounting controls requirements of Section 13(b)(2)(B) of the Exchange Act. The court permitted a limited number of claims to proceed based on alleged misstatements about SolarWinds’ cybersecurity practices and risks made before the cyberattack.

Though the statement notes that the decision “does not necessarily reflect the Commission’s position on any other case,” the SEC’s choice to dismiss the case “in the exercise of its discretion” rather than proceed to trial or finalize a settlement may indicate a shift in enforcement priorities, consistent with Chairman Atkin’s stated focus on financial materiality in mandated disclosures.

For more information, see the Joint Stipulation to Dismiss and Debevoise Debrief on the July 2024 dismissal of claims and Debevoise Debrief on settled charges in separate cybersecurity actions in October 2024.

SEC Emerging Matters

SEC Chairman Calls for Reset of Executive Pay Disclosures and SEC Rules

In a December 2, 2025 address at the New York Stock Exchange, Chairman Atkins called for a complete overhaul of executive-compensation disclosure rules. Chairman Atkins argued that the current system forces companies, even those with public floats under $250 million, to produce detailed disclosures that are not materially useful to investors. He criticized the disclosure regime as overly burdensome and not aligned with investor needs, arguing that it impedes capital-raising for smaller firms, and proposed a “reset” of disclosure requirements to make them more meaningful and proportionate. Several industry groups have submitted comment letters to the SEC providing their views on executive compensation disclosure requirements, available here.

SEC Eyes Changes to Conflict-of-Interest Rules for Big Four Auditors

On November 20, 2025, the SEC’s chief accountant, Kurt Hohl, announced that the SEC is considering revising long-standing auditor-independence rules. The announcement cited concerns about increasingly complex partnerships between major technology and AI companies and argued that the Big Four accounting firms are risking leaving large issuers with too few viable audit options. Hohl noted that existing rules, which bar firms from auditing companies with which they have any business relationship, may no longer be “fit for purpose” as AI providers rapidly form intertwined commercial ties with cloud platforms, chipmakers and consulting firms. As these relationships proliferate, rigid interpretation of independence standards could make it impossible for some public companies to choose among auditors. Hohl’s comments come as Big Four firms push for more flexibility, arguing current requirements are overly restrictive, and as the SEC may revisit rules enforced by the Public Company Accounting Oversight Board governing auditor independence.

SEC Eyes Reforms for Proxy Advisors Amid Scrutiny Over Bias and Conflicts

On November 14, 2025, Chairman Atkins announced that the SEC will re-examine the role and oversight of proxy advisory firms that provide voting guidance to shareholders. Chairman Atkins indicated the agency plans to issue “proposals and clarifications” sometime next year, although he didn’t provide a firm timetable. Chairman Atkins criticized both proxy advisory firms and passive institutional investors for exerting what some view as excessive influence over corporate decisions, especially when shareholder proposals are “weaponized.” Chairman Atkins’ comments come amid broader scrutiny: the Federal Trade Commission has reportedly launched an early-stage antitrust investigation into Institutional Shareholder Services Inc. and Glass Lewis & Co., and the Administration may consider executive actions aimed at restricting proxy-advisory firms from making recommendations for companies that have hired proxy advisers for consulting services.

Considerations for Senior Executive Transitions

Transitioning senior executives is a complex and sometimes difficult process that presents both business and legal challenges. Several major legal, governance, and practical considerations companies should address when navigating such transitions include:

1. Review of organizational documents and applicable state laws;
2. Implementation of required board actions;
3. Review of employment agreements;
4. Negotiation of severance arrangements for the outgoing executive and compensation packages for the incoming executive;
5. Assignment of roles and responsibilities to board members; and
6.  Completion of disclosure obligations and other required notifications.

For more information, see Debevoise in Depth.

Key Governance Considerations in PIPE Transactions

Private investment in public equity (“PIPE”) transactions can be a fast and cost-effective way for companies to raise capital relative to other options and can present an attractive investment opportunity for private equity funds. However, sponsor-backed PIPEs can raise several key governance issues that need to be carefully negotiated.

Several key areas of concern for sponsor-backed PIPEs include:

1. Is the issuance of securities authorized under the charter?
2. Are there contractual limitations to be considered?
3. Are board representation rights desired?
4. What voting and consent rights are required?
5. Is the issuer requesting a standstill or a lockup?
6. What information rights does the sponsor require?
7. Is stockholder approval required?
8. What is the path to liquidity and exit?
9. What are the SEC filing obligations?

For more information, see Debevoise Private Equity Report Quarterly.

The Road to Exit and Liquidity: Understanding Registration Rights

Registration rights are contractual obligations requiring an issuer to enable the public resale of previously unregistered securities through one or more SEC-registered transactions under the Securities Act of 1933.

There are several issues concerning registration rights that are important for a significant investor, such as a private equity firm, to consider when negotiating these rights. From the issuer’s perspective, it is often appropriate (and reasonable) to limit the number or frequency of registrations (and/or “takedowns” under a shelf-registration statement) during a given period (or in the aggregate) and to require a minimum number of securities for which registration rights may be exercised. Such limitations, however, can significantly restrict an investor’s ability to effectively and timely monetize its investment. Accordingly, an investor should consider whether the proposed restrictions unreasonably impair its ability to achieve investment objectives and are appropriately tailored relative to the number and value of the securities it holds. In addition, registration rights agreements customarily provide an issuer with the right to suspend or postpone a registration or shelf takedown request in certain circumstances. The agreements may also include cutback and lock-up provisions, in addition to enumerating issuer obligations to assist selling stockholders in connection with the registration, marketing and sale of their securities (e.g., maintaining registration statements and providing underwriting support).

For more information, see Debevoise in Depth.

Select Recent Securities Law Legislation Proposals

A summary of selected recent securities law-related legislation proposed in November and December 2025 follows:

This publication is for general information purposes only. It is not intended to provide, nor is it to be used as, a substitute for legal advice. In some jurisdictions it may be considered attorney advertising.