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This post is based on a comment letter submitted to the SEC regarding the SEC’s proposal on Rescinding Shareholder Proposal Rule 14a-8, by the National Association of Manufacturers. Below is the text of the letter with minor adjustments to eliminate the correspondence-related parts.

On behalf of the 13 million people who make things in America, the National Association of Manufacturers (“NAM”) is writing in response to the Commission’s proposed rescission of Rule 14a-8 to offer suggestions to facilitate a smoother transition to state oversight of shareholder proposals.

As the largest manufacturing association in the U.S., the NAM’s membership includes businesses of all sizes, across all industrial sectors, and in all 50 states. Manufacturers collectively contribute $2.94 trillion to the U.S. economy, and right sized, commonsense governance laws and regulations are critical to sustaining the manufacturing strength that underpins our nation’s prosperity.

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On October 23, 2026, the U.S. Securities and Exchange Commission (SEC) Division of Examinations (EXAMS) published its annual examination priorities (2027 Priorities)[1] , outlining areas of perceived risk and topics on which EXAMS will focus in the new fiscal year.

Substantively, many core themes from last year’s priorities carry over. The 2027 Priorities again underscore the importance of registrants’ standards of care, information security, and operational resiliency as well as the risks presented by alternative and complex products and investment strategies. The 2027 Priorities also (i) reflect an increased focus on artificial intelligence (AI), which the report refers to as “super intelligence” or SI and (ii) introduce certain new areas of focus, such as advisers’ reliance on proxy advisory firms and compliance with new rules or amendments to existing rules. This Sidley Update summarizes the examination focus areas across investment advisers, investment companies, broker-dealers, and other market participants, and it notes where the 2027 Priorities depart from the prior year’s.[2]

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In April 2026, the Division of Corporation Finance of the U.S. Securities and Exchange Commission shortened the minimum offering period for certain types of equity tender offers from 20 business days to 10 business days. Since then, Wilson Sonsini has played a lead role—representing both buyers and sellers—in several tender offers that used shortened offering periods. Several lessons and best practices are beginning to emerge.

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AI is entering corporate governance from all sides of the table. Investors are using it to process disclosure, customize voting policies, and prepare for engagements. Proxy advisors are moving toward AI enabled, policy driven research. Shareholder activists are using it to find targets and sharpen strategic theses. Boards are being asked to explain not only how they oversee AI risk, but how they assess its opportunities and broader strategic, capital, and talent implications. At the same time, board members are increasingly using AI to assist in board oversight, a development that raises new governance questions.

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Summary

On October 1, 2026, the Securities and Exchange Commission (the “SEC”) proposed amendments to the custody rules under the Investment Company Act of 1940 (the “Investment Company Act”) and the Investment Advisers Act of 1940 (the “Advisers Act”) (the “Proposed Rules”).[1]

The Proposed Rules would establish new custody arrangements for crypto assets while also revising existing custody requirements for registered investment advisers and regulated funds (registered management investment companies and business development companies (“BDCs”)),[2] including those that do not invest in crypto assets. Among the most significant proposed changes are the following.

• Permitting new crypto custody arrangements for advisers and regulated funds, including (i) custody of crypto assets[3] with state trust companies, subject to specified safeguards, and (ii) adviser self custody of crypto assets where no qualified custodian is available, subject to additional safeguarding and, for regulated funds, board oversight requirements.
• A new custody rule exception for advisers exercising discretionary trading authority, including for transactions that do not settle on a delivery versus payment (“DVP”) basis.
• Easing certain audit requirements, including by expanding accountant eligibility and extending audit delivery deadlines for certain private funds.
• Expanding broker dealer custody options for regulated funds and clarifying the application of custody rules to BDCs.

The Proposed Rules follow the SEC’s 2025 withdrawal of its 2023 “Safeguarding Advisory Client Assets” rule proposal, which would have expanded the scope of the Advisers Act custody rule to cover substantially all client assets and imposed additional requirements for qualified custodians affecting the availability of custodians for crypto assets.[4] In contrast, the current Proposed Rules would retain the Advisers Act custody rule’s existing coverage of client “funds or securities.” In statements accompanying the current proposal, Commissioners Uyeda and Peirce highlighted the additional flexibility for crypto custody under the Proposed Rules and contrasted it with the practical difficulties posed by the 2023 proposal.[5]

Regulated funds and registered investment advisers should assess the proposal’s potential impact on their custody arrangements and consider submitting comments to the SEC on issues relevant to their businesses. Comments are due by December 7, 2026.

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On January 19, 2006, in the clear blue Florida sky, an Atlas V rocketed off from Cape Canaveral carrying a small spacecraft called New Horizons.[1] This mission, planned by NASA (that is the National Aeronautics and Space Administration, not the other NASAA, the North American Securities Administrators Association), exited the Earth at more than 36,000 miles per hour for a long term “voyage to visit the planet Pluto and then beyond.”[2] That same month, the Securities and Exchange Commission launched something of similar importance, at least in my view,[3] namely its Statement Concerning Financial Penalties, also known as the “Corporate Penalty Statement.”[4]

Announced in conjunction with two settled accounting fraud cases, one with a $50 million civil penalty and the other with no penalty,[5] the Corporate Penalty Statement was issued in a unanimous decision of 5 to 0 under the leadership of Chairman Cox, after over 40 hours of meetings reconciling differing views amongst the Commissioners.[6] The Statement is a concise document with a specific mission, which is to provide an analytical framework so when the Commission imposes a civil penalty on a corporate issuer, it can explain why, and that explanation should rest on what Congress authorized and why it authorized it.[7] As a measure approved by Commission vote, the Statement should have a similar stature to other regulatory guidance provided by the Commission, whether in amicus briefs, adjudicatory opinions, administrative orders, interpretive releases, or otherwise.

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Disgraced Theranos founder Elizabeth Holmes is back in the news, dominating the screen in You Can See Everything which recently opened to critical acclaim and surprising box office success. As voyeuristic entertainment the film delivers, allowing viewers to see and believe what they want to see and believe. By focusing so intently on Holmes’s unknowable state of mind, however, the film leaves a critical question unanswered: Why did so many experienced investors and respected public figures disregard mounting evidence of Holmes’s deception, thereby enabling and helping perpetuate her devastating fraud?

When we dwell on Holmes’s pathology, as the film invites us to do, we risk overlooking the flaws in the startup ecosystem that helped propel the Theranos ruse, flaws that have contributed to other major startup scandals. My book, Untamed Unicorns: Why Startup Finance is Broken and How to Fix It (Harvard University Press), analyzes the legal structure that contributes to startup fraud, shifting the spotlight from the colorful personalities that animate these stories to the decades of deregulation of securities markets that helped set the stage for Theranos and similar scandals.

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We have previously written about the critical importance of public company boards maintaining focus on cybersecurity risk oversight, including in the face of burgeoning cybersecurity risks arising from the proliferation of advanced AI models and tools. An issue meriting immediate specific focus is the growing threat posed by nation state and state sponsored actors conducting malicious cyber operations, including espionage, theft, and sabotage of critical infrastructure.

Nation state and state sponsored cyber actors have inflicted substantial damage on companies and governments for more than a decade. Examples include operations attributed to North Korea (including the Lazarus Group, linked to the 2014 Sony Pictures hack and massive cryptocurrency thefts), Russia (including the SolarWinds supply chain compromise and the NotPetya malware attack), China (including cyber enabled IP theft and efforts to infiltrate critical U.S. infrastructure) and Iran (including attacks on U.S. water systems and, this year, a destructive wiper attack on a major U.S. medical device company). The nature of the threat can vary by industry, ranging from operational sabotage for infrastructure operators and IP theft for technology and life sciences companies, to financial theft for firms with digital asset exposure. As advanced AI tools become ever more capable, they are significantly enhancing these actors’ already powerful ability to find vulnerabilities, automate attacks, and operate at scale, increasing both the likelihood and potential severity of cyber incidents affecting public companies.

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The objectives of corporate director pay are much the same as the objectives of corporate executive pay, which are to provide strong incentives to increase shareholder value, retain key talent, and limit shareholder cost.

The conventional wisdom in executive pay is that the three basic objectives can be achieved by combining median target pay with a high percent of pay at risk. The conventional theory is that a high percent of pay at risk provides a strong incentive, not letting target pay fall below the peer median retains key talent and not letting target pay rise above the peer median limits shareholder cost. These principles have become widely embraced in corporate director pay over the last thirty years.

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Delaware’s judiciary is widely regarded as the most sophisticated corporate law judiciary in the United States. Its judges are not only experts in corporate law, but also keenly aware of the political forces that shape Delaware’s position as the jurisdiction of choice for publicly traded corporations. That institutional sophistication has historically allowed Delaware’s courts to navigate threats to the state’s corporate law franchise without inviting unnecessary confrontation. How, then, did Delaware’s judiciary provoke a political backlash that culminated in the hurried enactment of the 2025 amendments to Delaware’s corporate code, which displaced decades of judge made fiduciary duty doctrine and curtailed shareholder inspection rights?

To appreciate the puzzle, consider the judiciary’s handling of the litigation surrounding the federal government’s rescue of Bear Stearns during the 2008 financial crisis. The Federal Reserve orchestrated a merger between Bear Stearns and JP Morgan to prevent the investment bank’s collapse. The transaction involved aggressive deal protections designed to ensure shareholder approval, raising serious questions under Delaware corporate law. Yet when shareholders challenged the transaction, the Delaware Court of Chancery stayed the proceedings in favor of a parallel litigation in New York. Rather than strictly apply Delaware precedent and potentially thwart federal efforts to rescue Bear Stearns, the court effectively stepped aside.

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The U.S. system for issuing, trading, clearing, and holding securities rests on a book entry framework developed more than half a century ago. Familiar, time tested, and generally reliable, that framework also entails settlement delays, limited trading hours, layers of intermediaries and records, and substantial reconciliation work. Some market participants are now testing whether a different recordkeeping technology can reduce those frictions and modernize this infrastructure through tokenization, which is the representation of securities on a blockchain.

Proponents contend that tokenization could enable near instant settlement; 24/7 trading; fewer intermediaries; a potential fix for the tangled recordkeeping that complicates shareholder voting; and greater transparency on public blockchains, where activity is visible to anyone, though participants are pseudonymous. Securities in a programmable environment could also enable further efficiencies. These prospects have attracted institutions at the center of traditional securities trading, including the Depository Trust & Clearing Corporation (DTCC), which launched a tokenization service for financial institutions last week; NYSE and Nasdaq, which are developing tokenization platforms; and BlackRock, which offers an institutional on chain money market fund.

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Stewardship is becoming more sophisticated. But is it becoming more effective?

Investors have never had more tools, more data or more expectations around stewardship. Engagement programs have become more structured. Voting is increasingly integrated with broader ownership strategies. Sustainability data and analytics have become more sophisticated. Regulation and stewardship codes have raised expectations around transparency and accountability.

But there is a question we think deserves more attention. Are we becoming better at stewardship or simply doing more of it?

We think this is an important distinction. More engagement meetings do not necessarily mean more influence. More votes do not necessarily mean better outcomes. And a growing number of reported milestones does not necessarily tell us how much an investor contributed to the change.

Of course, activity matters. It tells us whether investors are using their stewardship capabilities and provides an important degree of transparency. But we believe the next step is to look beyond activity and ask what happens between an investor’s intention and the outcome. This is where we see the next step in the evolution of stewardship, which is moving from measuring stewardship activity to understanding stewardship effectiveness.

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On October 15, 2026, the staff of the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance (the Staff) released a series of new and revised Corporation Finance Interpretations (CFIs, formerly known as Compliance and Disclosure Interpretations, or C&DIs) addressing Rule 701 under the Securities Act of 1933 (the Securities Act), Form S-8 and the related registration fee rules, as well as a Form 4 filing timing question under Section 16 of the Securities Exchange Act of 1934 (the Exchange Act).[1] Most of the guidance is new, although the Staff also revised two longstanding Form S-8 interpretations, including one that reverses the Staff’s prior position on assumed awards held by former employees of an acquired company.

Taken together, the new CFIs largely resolve in companies’ favor several questions that practitioners have long treated as unclear, and in a number of respects place restricted stock and restricted stock units (RSUs) on the same footing that stock options have historically enjoyed. Below, we summarize the new guidance and highlight related existing guidance that continues to apply.

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In a recent post on the Harvard Law School Forum on Corporate Governance, titled “Rule 14a-8: Perhaps There’s Another Way,” Sarah Wilson, Founder and CEO of Minerva Analytics, tackles the hot topic of Rule 14a-8 rescission. At bottom, she argues for implementing a version of the UK Takeover Panel to regulate procedural requirements for proposal submission while leaving decisions about content scope to shareholders. Along the way, she argues that The Heritage Foundation, including by way of its American Investor Initiative, “is having second thoughts” about prior positions Heritage has taken on the issue, and that Heritage “seems distinctly unhappy with the SEC’s direction of travel” and is thus left in “the strange position of defending the very mechanism it spent years arguing had made shareholder meetings too political.” These characterizations of Heritage warrant some clarification.

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KEY TAKEAWAYS

• Broad opposition to disclosure reductions. Across our survey of institutional investors, 81% opposed the reductions in disclosures proposed or contemplated.
• No size threshold for more limited disclosures. While the SEC proposal reduces disclosure for companies with public float below $2 billion, 79% of investors indicated that reduced disclosure is not appropriate for a company of any size.
• Strong support for tabular disclosure. Investors strongly oppose the elimination of quantitative tables from disclosure requirements.
• Narrative disclosure remains relevant. Over two-thirds of investors surveyed support retention of the Compensation Discussion & Analysis (CD&A).
• Current disclosure length and complexity are not viewed as a significant concern by many investors. Investors have learned to extract the information they need and oppose changes that would eliminate information important to their voting decisions.

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Executive Summary

Voting at a company’s shareholder meeting is a basic right of share ownership and a core principle of corporate governance. As a fiduciary, BlackRock is legally required to make proxy voting determinations in a manner that is consistent with the investment objectives of clients who have delegated voting authority to us.

BIS’ Benchmark Policies, and the vote decisions made consistent with those policies, take a financial materiality based approach and reflect our reasonable and independent judgment of what is in the long term financial interests of clients. We do not act collectively with other shareholders or organizations in voting shares or follow any proxy research firm’s voting recommendations.

This report provides a comprehensive overview of BlackRock Investment Stewardship’s (BIS) approach to voting on corporate governance matters and other material risks and opportunities under our Benchmark Policies in the 2025/26 proxy year.[1]

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A recapitalization can give a private equity portfolio company the financial foundation for its next phase of growth. It can also create a compensation problem when the restructuring materially changes the equity available to management. When pre-recap awards are cancelled or replaced, management may emerge with materially lower incentive value and retentive equity just as the company is asking the team to rebuild enterprise value and deliver the sponsor’s investment thesis.

We call this the post-recap compensation dilemma. Sponsors understandably want to manage dilution following a restructuring, but changes to the post-recap equity structure can materially reduce the number or value of shares available to management. The result can be a meaningful gap between the value of original equity awards and replacement awards, with an even larger gap in potential realizable value at exit.

This gap matters. A management team that has navigated a restructuring is often being asked to execute an ambitious operating plan, restore growth, and ultimately deliver a successful liquidity event. Replacement awards with materially lower value can reduce the motivational power of the program at a time when alignment and retention become especially important.

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