US state pension funds warn of proposal disruptions after SEC move

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🗞️ Driving the news: State pension funds in Florida, Wisconsin and Connecticut have warned of disruption to shareholder proposals following the SEC's move to rescind Rule 14a-8, pointing to a changed stewardship landscape as the Commission withdraws from the process

🔭 The context: The SEC submitted a rescission proposal to the White House Office of Management and Budget on 28 August, with a rulemaking notice expected in October
• On 14 August the Division of Corporation Finance stopped responding to all no-action requests under the rule, ending decades of informal staff guidance on exclusions
• A December 2025 executive order directed the SEC to review all 14a-8 rules and guidance

🌍 Why it matters for corporate governance and sustainability: Rule 14a-8 has been the primary federal route for filing climate, diversity and executive pay proposals
• Therefore, devolving it to state incorporation law fragments access
• Pension trustees petitioning the SEC to retain the rule argued that long investment horizons and fiduciary obligations to beneficiaries make stewardship a duty rather than a choice, and the proposal process is a practical tool for engaging companies on material risks

⏭️ What's next: A notice of proposed rulemaking is expected in October, followed by a comment period
• The SEC has separately signalled plans to modernise proxy solicitation procedures, which activists argue could further restrict smaller investors

📈 One stat: $1 million in shares potentially required to file in Texas, against $2,000 under current SEC rules.

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