McGuireWoods Quarterly Securities & Capital Markets Update

Welcome to the McGuireWoods Quarterly Securities & Capital Markets Update, a quarterly series that reviews important securities law developments from the previous quarter and alerts readers to significant considerations for the upcoming reporting period.

This edition provides updates on developments during the third quarter of 2026 and considerations for calendar year-end registrants regarding their upcoming Q3 Quarterly Reports on Form 10-Q, proxy statements and annual meetings of shareholders; the fourth quarter reporting period; and other topics.

Table of Contents

• SEC Proposes Rescission of Rule 14a-8
• SEC Grants “Innovation Exemption” for Trading of Tokenized Stocks
• SEC’s Proposed Regulation E-Delivery
• SEC’s Updated Guidance Regarding Schedule 13G Eligibility
• SEC’s Increased Focus on Earnings Calls
• Texas Stock Exchange Proposes “Mirror Voting” for Uninstructed Shares
• Annual EDGAR Confirmations
• SEC Filing Fee Update

---

SEC Proposes Rescission of Rule 14a-8

On Sept. 16, 2026, the U.S. Securities and Exchange Commission (SEC) issued a proposing release (Release No. 34-106383) to rescind Rule 14a-8 under the Securities Exchange Act of 1934, as amended (Exchange Act), in its entirety. The rule, or an earlier version of it, has governed whether shareholder proposals should be included in company proxy materials since 1947. The SEC’s position is that the rule exceeds its statutory authority under Section 14(a) because it intrudes into state law without express authorization from Congress. In the SEC’s view, Section 14(a) empowers it to facilitate state law rights, not alter them. If the rule is rescinded, state law and company governing documents would decide whether shareholder proposals should be in company proxy materials. The rescission would apply to all companies subject to the proxy rules, including registered investment companies and business development companies.

The SEC also proposed amendments to Rule 14a-4(c). These would let a company exercise discretionary voting authority over a shareholder proposal that is presented at the meeting but not included in its proxy materials, if three conditions are met:

• The proxy statement briefly describes the matter and how the company intends to vote.
• The proxy card cross-references that disclosure.
• The proxy card includes a check box that lets each shareholder prevent the company from exercising that authority over the shareholder’s own shares.

In a companion release (Release No. 33-11439), the SEC proposed to modernize the proxy solicitation rules. Changes include an EDGAR-based alternative to the annual report delivery requirement, rescinding Notices of Exempt Solicitation, and shortening the broker search period from 20 business days to five business days. Both proposals were published in the Federal Register on Sept. 21, 2026, and comments are due on or before Nov. 20, 2026.

The proposal follows the Division of Corporation Finance’s (Division) Aug. 14, 2026, announcement that it would permanently stop responding to all Rule 14a-8 no-action requests. That change leaves shareholder proposal exclusion decisions entirely to companies and their counsel.

Practical Considerations

Rule 14a-8 remains in effect while the rulemaking is pending. Proposals for 2027 annual meetings of calendar-year companies will begin arriving while the rescission is still only proposed. Companies therefore must continue complying with Rule 14a-8, including the Rule 14a-8(j) requirement to notify the SEC and the proponent at least 80 calendar days before filing the definitive proxy statement. Because the Division will not provide no-action responses, companies should carefully document the basis for any exclusion in light of potential proponent litigation. Rescission of Rule 14a-8 may not reduce the number of proposals. Commissioner Mark T. Uyeda cautioned that once the rule’s exclusion bases are gone, the number and scope of proposals could actually increase where neither state law nor a company’s governing documents restrict what shareholders may submit. In addition, investors may press companies to adopt Rule 14a-8-like proposal rights in their governing documents. Companies should evaluate how the proposals, if adopted, would affect their proxy season planning, shareholder engagement strategies and governance frameworks.

For more details regarding the SEC’s proposed rescission of Rule 14a-8 and the related proxy solicitation amendments, see McGuireWoods’ Sept. 28, 2026, alert. The SEC’s press release also describes the proposals.

SEC Grants “Innovation Exemption” for Trading of Tokenized Stocks

On Sept. 17, 2026, the SEC issued an Innovation Exemption order (Release No. 34-106402; File No. 4-927) (Order) that grants a five-year, conditional exemption intended to permit trading of certain tokenized national market system (NMS) stocks on new Tokenized Securities Venues (TSVs). The Order took effect immediately and expires on Sept. 17, 2031.

The Order is significant for companies because it reaches every company whose stock trades on a national securities exchange, not only crypto-native companies. As a result, an unaffiliated third party may tokenize a company’s listed shares and a TSV may make them available for onchain trading without the company’s affirmative consent, subject to the company’s right to receive notice and to object.

The Exemptions

The Order grants two exemptions under the Exchange Act:

• TSV Exemption. TSVs are exempt from the definition of “exchange” in Section 3(a)(1) of the Exchange Act, which allows them to operate without registering as a national securities exchange or operating as an alternative trading system under Regulation ATS. A TSV is an organization, association or group of persons that brings together buyers and sellers of tokenized NMS stock by (1) providing one or more permissioned automated market makers and liquidity pools (AMM Liquidity Pools) through which participants trade and (2) setting standards for access to trading on those pools.

• Covered Firm Exemption. Certain liquidity providers that supply tokenized NMS stock to an AMM Liquidity Pool used by a TSV are exempt from the definition of “dealer” in Section 3(a)(5) of the Exchange Act.

Several conditions apply to the relief:

• Tokenized NMS stock may be tokenized by or on behalf of the company or by an unaffiliated third party.

• The tokens must carry the same ownership, dividend, voting and liquidation rights as the conventional shares of the same class. Synthetic instruments that merely provide economic exposure are excluded.

• Venues are subject to symbol and volume caps. For Tier 1 stocks, such as S&P 500 and Russell 1000 constituents, the caps are 75 symbols and 0.25% of prior-month average daily volume. For Tier 2 stocks, the caps are 250 symbols and 2.5% of prior-month average daily volume.

• TSVs must halt trading whenever the primary listing exchange halts trading, may not permit leverage and must give 30 days’ public notice before commencing operations.

• No primary issuances may occur on a TSV. The Order also provides no relief from Securities Act registration requirements.

Chairman Paul S. Atkins described the Order as an interim measure that “must be followed by durable rulemaking.” The Order also requests public comment on all aspects of the exemptions.

Issuer Notice and Objection Right

Before a TSV makes third-party-tokenized stock available for trading, it must send written notice to the company at the physical address or email address of its principal executive offices shown on the cover page of its Exchange Act reports. The process then works as follows:

• The company may object in writing within 30 calendar days after receiving the notice.

• A timely objection bars that TSV from trading the token, and the TSV must post the objection on its website within five days.

• If the company does not respond, trading on that venue may proceed.

• Objections are venue-specific, and there is no central registry. Companies therefore may receive notices from, and need to object to, multiple TSVs.

• Companies that have tokenized their own shares have no notice or objection right for those company-tokenized shares. They keep the right to object to third-party-tokenized shares.

These notices are already arriving. On Oct. 4, 2026, one of the first TSVs published its required public notice, which listed large-cap companies in the technology, retail and financial services industries among the tokenized NMS stocks it intends to make available for trading.

Considerations for Companies

Companies may wish to take several actions:

• Strengthen notice intake. Confirm the addresses on Exchange Act report cover pages. Make sure mail and email received are monitored daily and escalated promptly to the legal department and corporate secretary, because the 30-day clock starts upon receipt.

• Decide on a tokenization position in advance. Decide whether to object to third-party tokenization. Designate who will evaluate notices and who has authority to submit objections. Consider preparing a form objection.

• Assess risks and benefits. On the benefit side, consider expanded investor visibility and 24/7 trading. On the risk side, consider shareholder register reconciliation, potential price dislocations between AMM-generated and traditional market prices, and how dividends, proxy materials and voting instructions will reach token holders.

• Engage service providers. Work with transfer agents and proxy providers to understand how tokenized positions could affect shareholder records, record dates, proxy distribution and corporate actions.

• Monitor and comment. Track TSV public notices of planned operations and consider submitting comments while the SEC evaluates the framework.

SEC’s Proposed Regulation E-Delivery

On July 16, 2026, the SEC proposed Regulation E-Delivery, a new rule that would allow companies, broker-dealers, investment advisers, funds and other market participants to use electronic delivery as the default means of satisfying their information delivery obligations under the federal securities laws. The proposal would “flip the script” on the SEC’s decades-old framework under which recipients generally must opt in before receiving materials electronically by making e-delivery the default unless a recipient opts out. The rule would reach a broad range of materials, including prospectuses, proxy statements, trade confirmations, Form CRS and adviser brochures. An entity could rely on the rule only if (i) the recipient has provided an electronic address (e.g., e-mail address, cell phone number), (ii) the entity has given prominent disclosure that materials will be sent to the electronic address and (iii) the recipient has not opted out. Under the proposal, recipients would retain the right to free paper copies and to opt out at any time. Entities could comply through one of two methods: direct delivery or a statement of availability. Under direct delivery, materials that do not contain personal financial information (such as account numbers or transaction details) could be sent straight to the recipient’s electronic address. Alternatively, an entity could send a statement of availability, a notice linking to a website on which the materials are posted, which could be used for any materials (including those containing personal financial information).

Because the proposal is permissive rather than mandatory, entities could continue to use paper or opt-in arrangements if they prefer. Investors who currently receive paper would receive two paper notices, at least 180 days and 30 days, respectively, before being transitioned to e-delivery, giving them an opportunity to opt out. For companies, one of the most significant changes would be replacing the Notice of Internet Availability of Proxy Materials, which many companies currently deliver in paper form, with an electronic statement of availability. As a result, the requirement in current Rule 14a-16 that such notice be sent at least 40 calendar days before the shareholder meeting would be eliminated. The public comment period closed in September 2026, and the SEC proposed a two-year compliance period once the rule is finalized.

Practical Considerations

We expect that this rule will be adopted either in late 2026 or early 2027. Since a company must have a recipient’s electronic address to use electronic delivery, companies that expect to use electronic delivery under the rule should begin inventorying existing e-delivery consent records and confirming with their transfer agents and proxy service providers the accuracy of shareholder electronic addresses. They should also consider the operational steps required to deliver the 180-day and 30-day transition notices.

SEC’s Updated Guidance Regarding Schedule 13G Eligibility

On Sept. 2, 2026, the Division published three new Corporate Finance Interpretations (CFIs) providing additional clarity regarding the circumstances in which certain shareholder communications will not, by themselves, disqualify a shareholder from reporting on Schedule 13G.

Schedule 13G Background

Crossing the 5% beneficial ownership threshold in a registered class of voting equity securities triggers a reporting obligation on one of two forms: the comprehensive Schedule 13D or the short-form Schedule 13G. Access to Schedule 13G under Rule 13d-1(b) or Rule 13d-1(c) of the Exchange Act depends, in part, on the filer’s ability to certify that the securities “were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer.” Given that Schedule 13D demands a fuller narrative, including any plans or proposals concerning the issuer, along with prompt updates, large holders have a strong practical interest in knowing which conversations with management would disqualify them from Schedule 13G eligibility.

The Division provided guidance on this issue multiple times through its CFIs, tightening the boundaries of passive engagement in 2025 and then marking out several protected scenarios in September 2026.

Prior Division Guidance on Passive Engagement (2025)

On Feb. 11, 2025, the Division added new Question 103.12 to its CFIs, providing guidance on when a Schedule 13G filer’s interactions with a company’s management would have a disqualifying purpose or effect. Question 103.12 emphasizes that the context in which a shareholder engagement occurs is highly relevant. It separates two modes of engagement: discussing with management a viewpoint and its likely bearing on future votes is generally acceptable, but going beyond such a discussion by exerting pressure on management to implement specific measures or changes to a policy may be disqualifying.

Many institutional holders reportedly responded by canceling engagements, holding fewer meetings or attending meetings solely to listen. As a result, companies received less meaningful feedback and less predictability about how key holders would vote on important matters.

Three New CFIs on Common Engagement Scenarios (2026)

On Sept. 2, 2026, the Division published three new CFIs (Questions 103.13, 103.14 and 103.15), each addressing a common form of investor contact by Schedule 13G filers. The new CFIs operate as applications of the framework provided in Question 103.12 (discussed above) to more concrete fact patterns.

• Meetings requested by the company (Question 103.13). This CFI provides that, generally, an engagement initiated by the company itself or a response to a company’s request to understand why the shareholder voted in a certain manner at a past shareholder meeting is less likely to be viewed as an attempt by the shareholder to “influence” control of the company. Accordingly, taking part in such a meeting would not, by itself, disqualify a shareholder from reporting on a Schedule 13G. Still, the determination is based on all the relevant facts and circumstances; the company’s invitation does not immunize every statement the holder makes once the meeting begins.
• Conversations with proxy solicitors (Question 103.14). This CFI provides that the fact that a shareholder discusses its views on a particular topic and how those views could inform its voting decisions with a person engaged in a proxy solicitation would not, by itself, disqualify the shareholder from reporting on Schedule 13G. Because this CFI does not distinguish between the company and dissident solicitors, it suggests that shareholders may take meetings with each side in a contested election. However, the comfort is confined to sharing perspectives. Advocating for an insurgent slate or bargaining votes for concessions is still subject to Question 103.12, discussed above.
• Questions about company disclosure (Question 103.15). This CFI provides that a shareholder would not be disqualified from reporting on a Schedule 13G solely because it engages with a company to better understand the company’s disclosures or other public communications, such as its proxy solicitation materials.

Considerations for Companies

The CFIs speak to investor behavior, but issuers planning future outreach should consider the following:

• Take the initiative on outreach. Because the Division treats company-initiated meetings more favorably, companies that send the invitation and bring targeted questions may draw more candid responses. It is a good practice to log who requested each meeting and its agenda.
• Use robust engagement practices. Safeguards introduced after February 2025, such as advance agendas and opening statements framing the meeting’s purpose, remain advisable.
• Initiate discussions before proxy filings. Companies may benefit from initiating discussions before their proxy filings, since a Schedule 13G filer may feel more comfortable that its feedback is not influencing the control of the company if no scheduled vote is on the horizon.
• Remember the limits. The new CFIs protect only the specified contact discussed therein. A meeting can drift out of such protected territory if the shareholder begins insisting on certain changes or conditioning its vote based on the company’s response.

SEC’s Increased Focus on Earnings Calls

At the Society for Corporate Governance conference held in July 2026 in Nashville, Tennessee, Jim Moloney, Director of the SEC’s Division of Corporation Finance, stated that he would rather see more Division resources devoted to listening to company earnings calls than to reviewing routine Form S-3 shelf registration statements.

Company earnings calls are often targeted by the Division because companies may discuss material topics of interest to their investors on their earnings calls without covering them in the company’s related Exchange Act filings.

Consistent with this position, the Division recently commented on several companies’ disclosures in their Exchange Act filings as compared to their disclosures in corresponding earnings calls, including:

• The need for a company to disclose revenues from external customers for each of the company’s product lines within one of the company’s reporting segments because the company’s management cited product mix as a factor impacting gross margins and earnings per share on its earnings calls.
• On a company’s earnings call, management discussed several factors that drove its revenue growth, but the company did not discuss such factors in its corresponding Annual Report on Form 10-K. The Division’s comment requested that the company reconcile the earnings call disclosures with its MD&A analysis and explain how the company considered discussing and quantifying the earnings call factors in its filings.
• A company disclosed a number of user engagement metrics on its earnings call that were not described or defined in the company’s MD&A. The Division’s comment requested that the company show the Division how the company intends to revise its MD&A to define, quantify and analyze the user engagement metrics as part of its MD&A because user engagement metrics appeared to be an important factor that management considered in evaluating the company’s business and allocating its resources. The Division also noted that the company’s management spent time discussing some short-term industrywide policy headwinds that were impacting client budgets and advertising booking rates. The Division’s comment also requested that the company show the Division how the company intended to revise the company’s MD&A to address any known material trends, demands, commitments, events or uncertainties that are reasonably likely to result in a material change to the company’s liquidity or results of operations. 

As a result, companies should direct their accounting and financial reporting teams, together with counsel, to review earnings call scripts and prepared remarks for consistency with Exchange Act filings, including segment, MD&A, key performance indicator and non-GAAP disclosures (including Item 10(e) of Regulation S-K and Regulation G compliance). Additionally, companies should remind senior management that material information and key metrics emphasized during the question-and-answer portion of the earnings call should be consistent with and, when appropriate, addressed in the company’s Exchange Act filings.

Texas Stock Exchange Proposes “Mirror Voting” for Uninstructed Shares

The Texas Stock Exchange (TXSE) put forward a proposal that could change how shareholder votes are counted at companies that are listed on the TXSE. Under proposed amendments to TXSE Rule 13.003 (File No. SR-TXSE-2026-008), exchange members holding shares in street name would have to vote any shares for which the beneficial owner gave no instructions. The member would cast those unvoted shares on each ballot item according to the percentage split reflected in the instructions it did receive from its other customers holding that security. This approach is often called “mirror” or proportional voting. It would replace the current system of broker discretionary voting, under which brokers may vote uninstructed shares only on “routine” matters. Under the new approach, the same allocation method would govern every item, whether or not it is considered routine. According to TXSE, tying results to the preferences of investors who actually vote would make outcomes more representative, while also making quorum easier to achieve and reducing the cost of soliciting proxies. The proposal also fits a broader Texas push to change shareholder engagement. That push includes ExxonMobil’s retail investor voting program, for which the Division granted no-action relief in 2025, and 2025 Texas legislation (SB 1057) that allows qualifying companies to set higher ownership thresholds for shareholder proposals. TXSE’s Chairman and CEO publicly described the exchange-level reform as a way to build on the ExxonMobil model and to limit the influence of proxy advisors.

The proposal is now under formal SEC review. TXSE filed the rule change on May 28, 2026, and notice was published in the Federal Register on June 11, 2026. On July 21, 2026, the SEC extended the time it has to act. Then, on Sept. 8, 2026, it instituted proceedings under Section 19(b)(2)(B) of the Exchange Act to determine whether to approve or disapprove the rule change (Release No. 34-106292). Comments were due Oct. 2, 2026, and rebuttal comments were due Oct. 16, 2026. This procedural step is not a ruling on the merits, but it requires TXSE to establish that its proposal satisfies Exchange Act standards, with the SEC specifically seeking input on Sections 6(b)(5) and 6(b)(10). The statute generally requires approval or disapproval within 180 days after publication of notice, or approximately December 2026. A 60-day extension, if used, would move the deadline into early 2027.

Industry reaction has been mixed. In its comment letter, the Securities Industry and Financial Markets Association said it “supports the goal of proportional voting to improve quorum and retail representation” but raised “significant concerns” about whether the rule can work in practice. The Council of Institutional Investors has urged the SEC to reject the proposal. Skeptics argue that a formula that appears neutral can still alter outcomes. This is especially true when approval requires a majority of all outstanding shares: today, uninstructed shares that go unvoted function as de facto votes against, but under the proposal, they would be allocated in proportion to instructed votes. Opponents also worry that if only a modest fraction of holders submit instructions, their preferences would be projected onto a far greater number of shares whose owners expressed no view.

Considerations

Several groups would be affected if the rule is adopted:

• Companies considering a TXSE listing may wish to test how significant proposals would fare if unvoted shares were allocated proportionally.
• Broker-dealers would face new operational and compliance obligations to calculate and oversee the allocation of unvoted shares.
• Fund managers should consider whether their voting instructions would carry added weight at TXSE-listed companies and whether related policies or disclosures warrant updating.

Annual EDGAR Confirmations

Every entity and individual that maintains an EDGAR filer account, including companies and all Section 16 reporting persons (directors, officers and 10%+ beneficial owners), is subject to an annual EDGAR confirmation requirement. This requirement was introduced as part of the SEC’s EDGAR Next platform, which launched on March 24, 2025, with compliance required beginning Sept. 15, 2025. Once a year, each filer must log in to the EDGAR Filer Management dashboard and confirm that: (1) all individuals and entities listed on the account (including users, account administrators, technical administrators and delegated entities such as filing agents and financial printers) are still authorized to act on the filer’s behalf, and (2) all filer information reflected on the dashboard is accurate and up to date. The confirmation is a security measure designed to ensure that former employees, outdated vendor relationships and other unauthorized parties do not retain access to the filer’s EDGAR filing capabilities.

Each filer account is assigned an ongoing quarterly confirmation deadline (March 31, June 30, Sept. 30 or Dec. 31, or the next business day if the date falls on a weekend or holiday). The specific due date is displayed on the filer’s Filer Management dashboard, and EDGAR sends reminder emails beginning six weeks before the deadline. Filers may complete the confirmation before the deadline, even in an earlier quarter. Early submission, however, will reset the ongoing deadline to one year after the end of the quarter in which the early confirmation was submitted. If a filer misses its deadline, there is a three-month grace period during which the filer retains full EDGAR access and receives daily reminders to complete the confirmation. If the grace period expires without confirmation, the filer’s EDGAR account is deactivated, and no one may submit filings on the filer’s behalf until the filer submits a new Form ID application. Upon approval of a new Form ID, the filer will retain its existing CIK number and filing history, but all prior authorizations and delegations must be re-entered.

In preparation, companies should confirm their annual EDGAR confirmation deadlines and calendar them, along with reminders for all Section 16 insiders who maintain their own EDGAR accounts. Account administrators should review the accuracy of all information on the Filer Management dashboard, including contact details and the authorization status of all users and delegated entities, in advance of the applicable deadline. Companies may also consider whether submitting the confirmation early in a more convenient quarter would better align the ongoing deadline with the company’s internal compliance calendar. Given the potentially disruptive consequences of account deactivation, including the inability to make any SEC filings and the need to reapply via a notarized Form ID, timely completion of the confirmations should be a priority compliance item.

SEC Filing Fee Update

On Aug. 21, 2026, the SEC announced that the fee rate for securities registration will decrease from $138.10 per million dollars to $87.00 per million dollars, effective Oct. 1, 2026. This represents an approximately 37% reduction and marks the second consecutive year of fee rate decreases.

The new rate applies to the registration of securities under Section 6(b) of the Securities Act of 1933, as amended, the repurchase of securities under Section 13(e) of the Exchange Act and specified proxy solicitations and tender offers under Section 14(g) of the Exchange Act. Over recent years, the filing fee rate has fluctuated significantly, from $110.20 per million in fiscal year 2023, to $147.60 in fiscal year 2024, $153.10 in fiscal year 2025 and $138.10 in fiscal year 2026, before falling to the current $87.00 rate for fiscal year 2027.

Companies and their advisors should update all fee calculation materials to reflect the new $87.00 rate for filings made on or after Oct. 1, 2026. This includes, for example, internal spreadsheets and other tools used to calculate filing fee amounts in connection with registration statements as well as fee tables for proxy solicitations, tender offers and securities repurchases.

For questions about these topics, contact the authors, your McGuireWoods contact or a member of the firm’s Public Company Advisory Practice Group.