SEC Grants No-Action Relief for Retail Voting Program

On September 15, 2025, the Staff of the U.S. SEC’s Division of Corporation Finance issued no-action relief to a U.S. public company in connection with a new retail voting program.¹

The new program provides retail shareholders with the ability to authorize the company to vote their shares in accordance with the recommendations of its board of directors at future shareholder meetings. Participants may elect whether their standing instructions apply to all matters or to all matters except “special situations” (such as contested director elections and M&A transactions requiring shareholder approval).

The Staff stated it would not recommend enforcement action against the company in connection with this program. This marks the first time the Staff has permitted a public company to directly facilitate standing voting instructions for its retail investors. While certain institutional voting programs and pass-through voting mechanisms have drawn significant attention in recent years, the Staff’s position signals a potential new avenue for issuers to engage retail investors in the proxy voting process.

I. Key Features of the Retail Voting Program

The SEC’s no-action relief was based on several core program elements:

• Eligible investors. The program will be open to all retail investors, whether registered holders or beneficial owners (i.e., through intermediaries like banks, brokers or plan administrators). It will not be available to investment advisers registered under the Investment Advisers Act of 1940 that are exercising voting authority with respect to clients’ securities.
• Voluntary participation. Participation will be free of charge. Investors can opt in and opt out at any time at no cost.  
• Proxy materials. Participating retail shareholders will continue to receive all proxy materials filed for upcoming shareholder meetings. The program will not limit or restrict shareholders from voting at any time using the proxy materials they received for each meeting.
• Annual reminders. Enrolled investors will receive annual reminders of their participation and right to opt out (during the time period when the Company is not soliciting votes for its annual shareholder meeting).
• Disclosure. The company will disclose information about the program on its website and in its Schedule 14A filing and update that disclosure as needed.

II. Implications for Public Companies

The Staff’s position opens the door for other issuers to adopt similar retail voting programs as early as the 2026 proxy season. Companies considering such programs should account for several implications:

1. Potential to increase retail participation. Historically, retail shareholders have voted at significantly lower rates than institutional investors. A program of this kind might expand retail participation at shareholder meetings, particularly at companies with significant retail ownership.
2. New governance dynamics. By aligning retail votes with board recommendations, issuers may bolster management support, at least in uncontested votes. However, the option for shareholders to carve out special situations from their authorization underscores the SEC’s focus on preserving shareholder discretion in proxy contests and other significant votes.
3. Unknown reaction from market participants. Proxy advisory firms and institutional investors have not yet taken public positions on these programs. Their response will be critical in determining whether these programs gain traction.
4. Legal uncertainties. Issuers should carefully evaluate compliance with state corporate law and other legal requirements, including the potential litigation risk that investors may later challenge the program.
5. Implementation lead time. Establishing a retail voting program will require coordination with intermediaries, vote-processing agents, and technology providers. Companies contemplating a 2026 rollout should begin preparations promptly.
6. Operational complexity and cost. Even if participation is free for shareholders, issuers will bear costs and operational burdens for setting up the infrastructure, working with intermediaries, and managing reminders. Boards will want to weigh these costs against the anticipated increase in retail engagement.

 III. What’s Next

Issuers—particularly those with large retail investor bases—should evaluate whether a retail voting program could advance their engagement and governance objectives. At the same time, boards should carefully consider the legal, disclosure, and investor-relations implications before pursuing adoption.

¹See SEC no-action letter, September 15, 2025 (here). See also The Wall Street Journal, September 15, 2025 (here).