The SEC’s Division of Corporation Finance just announced that it will largely step back from the shareholder proposal no-action letter process for the current proxy season (October 1, 2025 – September 30, 2026). The Division cited three reasons: resource constraints following the recent government shutdown, a high volume of registration statements competing for staff attention, and the extensive existing body of guidance already available to companies and proponents. The announcement aligns with the deregulatory approach we flagged in September when discussing potential reforms to the shareholder proposal process under the current SEC.

For more insights and analysis from Cleary lawyers on policy and regulatory developments from a legal perspective, visit What to Expect From a Second Trump Administration.

As the U.S. government shutdown stretches into its sixth week—and in light of the SEC’s clarification that it will not be reviewing and declaring registration statements effective via the traditional route during the shutdown—issuers seeking to proceed with primary and secondary offerings are turning to a statutory alternative that permits registration statements to go automatically effective without SEC clearance.[1] The exchanges have indicated willingness to play along, with some regulatory caveats,[2] and SEC leadership has publicly endorsed this method of having a registration statement go effective during the shutdown.[3]

On September 17, 2025, the Securities and Exchange Commission (the Commission) voted 3-1 to issue a policy statement clarifying that the presence of a mandatory arbitration provision for investor claims arising under the federal securities laws in an issuer’s articles or certificate of incorporation, bylaws or any securities-related contractual agreements (Operating Documents) will not affect the Commission’s decision whether to accelerate the effectiveness of that issuer’s registration statement.[1] The statement marks a reversal of the Commission’s longstanding refusal to accelerate an issuer’s registration statement under these circumstances,[2] a position that has resulted in U.S. public companies generally not including mandatory arbitration provisions for federal securities law claims in their Operating Documents. As a result, these claims can and have historically been filed as class actions in federal courts.