Steven Davidoff analyzes the SEC's options:
The United States Court of Appeals for the District of Columbia Circuit has taken a chainsaw to the Securities and Exchange Commission’s proxy access rule, striking it down in a 21-page opinion. A panel of three judges from the appeals court based its ruling last week on what it perceived to be the S.E.C.’s failure to fully consider the costs and the benefits of this rule. With the S.E.C. wounded and proxy access seemingly on life support, if not dead, the question is what comes next?
The S.E.C. has three options:
1. Appeal the D.C. Circuit opinion to the full federal appeals court.
2. Rewrite the rule and address the deficiencies cited by the D.C. Circuit.
3. Do nothing and let the proxy rule die.
.... The S.E.C. has invested years in proxy access, so if it does not appeal I also suspect the commission will not let the rule die. Instead, I believe the S.E.C. will rewrite this rule with more analysis along the lines advocated by the D.C. Circuit Court. But any rule-making process will take another six months to a year as the S.E.C. again deals with the controversial nature of these rules. Proxy access will at best not be proposed again until 2012 and likely not be effective until 2013. And there will be another court challenge, meaning a likely delay even beyond that.
Which means the outcome of proxy access may depend on the outcome of the 2012 election. As Davidoff correctly points out, a GOP-dominated SEC is unlikely to move forward with proxy access.
