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U.S. Securities and Exchange Commission

Statement by SEC Staff:
Opening Statement of the Division of Corporation Finance at the SEC Open Meeting


Raymond A. Be

Special Counsel, Office of Rulemaking, Division of Corporation Finance
U.S. Securities and Exchange Commission

Washington, D.C.
June 20, 2007

Good afternoon.

The adopting release builds on the voluntary "notice and access model" that the Commission adopted in January. The amendments create a model that provides two options that companies and other soliciting persons can use to provide their proxy materials to shareholders: the first option is the "notice only option," and the second is the "full set delivery option." Soliciting parties may choose to rely on one option with respect to some shareholders and the other option for different shareholders.

Under the notice only option, an issuer will comply with exactly the same requirements under the voluntary notice and access model. These requirements include:

  • Sending a Notice of Internet Availability of Proxy Materials to shareholders at least 40 days before the meeting date;
  • Posting the proxy materials on an Internet Web site; and
  • Sending copies of the proxy materials to shareholders upon request, free of charge.

Under the full set delivery option, a soliciting party can continue to rely on traditional means of proxy delivery by sending a full set of proxy materials to shareholders, with only two additional requirements. First, the soliciting party must provide the information required in a Notice of Internet Availability of Proxy Materials in its proxy materials or in a separate Notice that would accompany the full set of materials. Second, the soliciting party must post its proxy materials on the Internet.

The full set delivery option is designed to minimize any burden that the amended rules would impose on soliciting parties, while ensuring shareholders can access their proxy materials electronically if they choose to do so.

Although these two new requirements will impose a small additional cost on soliciting parties, many companies already post their proxy materials on their website.

Many commenters on the voluntary model were concerned about the uncertainty of the cost of fulfilling requests for paper copies. Under this second option, because the soliciting party already would have sent a copy of the proxy materials to shareholders, it need not provide yet another copy.

As with the voluntary model, the amendments do not apply to business combination transactions. Large accelerated filers, not including registered investment companies, must comply with the amendments regarding proxy solicitations beginning on or after January 1, 2008. Issuers that are not large accelerated filers, registered investment companies, and soliciting persons other than issuers must comply with the amendments regarding proxy solicitations commencing on or after January 1, 2009.

Thank you. We would be happy to answer any questions that you have about this release.


Modified: 06/20/2007