The proxy access rule will apply to all Exchange Act reporting companies, including investment companies and controlled companies, regardless of size, except for foreign private issuers, registered debt-only reporting companies and companies governed by charter documents or state or foreign corporation laws that prohibit shareholders from nominating directors. Smaller reporting companies (generally those with a public float of less than $75 million) will be required to comply with the rule after a three-year transition period. Public companies to which the proxy access rule applies may not opt out of compliance with the rule.

The proxy access rule will take effect 60 days after its September 16, 2010 publication in the Federal Register, or November 15, 2010. Thus, the rule will be effective for the 2011 proxy season (or the 2014 proxy season for smaller reporting companies).

Public companies should consider the effect that the proxy access rule may have on director elections, taking into account the nature of their shareholder bases, existing relations with shareholders, board structure and composition, corporate law provisions of the company’s state of incorporation, and election provisions of their charter and bylaws.

Read Final Rule