SEC Amends Rules to Facilitate Use of Electronic Shareholder Forums

February 01, 2008
The Securities and Exchange Commission (the “SEC”) has amended the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to facilitate the use of electronic shareholder forums. These amendments revise the proxy rules under Section 14 of the Exchange Act (1) to provide that a company or shareholder that establishes or maintains an electronic shareholder forum will be subject to liability under federal securities laws only for statements it makes and not those made by others in the forum and (2) to clarify that statements posted to an electronic shareholder forum generally will be exempt from regulation under the proxy rules. Rather than prescribe any specific approach to the conduct of an online shareholder forum, however, the SEC has designed the amendments to remove impediments to continued private sector experimentation with the use of the Internet and to improve and encourage communication among shareholders and between shareholders and the company. The new rules will be effective February 25, 2008.