Request that the Investor Advisory Committee recommend that the Commission initiate a rulemaking to permit retail shareholders to use Standing Voting Instructions (SVIs) for recurring proxy matters. SVIs would allow shareholders to provide pre-authorized voting preferences across meetings and issuers.
Take Action: Provide comments for consideration by the SEC-IAC in its role as the Commission’s advisor. Submit via online form or email. Deadline: December 3, 2025, so the Committee can review your comments prior to the meeting.
The current regulatory framework under Exchange Act Rule 14a-4 prohibits this practice, reducing participation and limiting shareholder democracy. Moreover, the recent SEC no-action decision allowing Exxon Mobil to solicit a durable, revocable proxy from retail investors is inconsistent with SEC rules. It establishes an imbalanced precedent under which an issuer can take action in support of management that would not otherwise be available to retail investors engaged in active portfolio stewardship.
A rulemaking to enable SVIs would: (1) significantly increase retail shareholder voting rates, (2) deepen investor engagement, (3) help companies meet quorum, and (4) enhance alignment between shareholder preferences and corporate governance outcomes.
At an SEC-IAC meeting on December 4, 2025, I (James McRitchie) will urge the Investor Advisory Committee to recommend that the Commission initiate a rulemaking to enable SVIs for retail shareholders.
Take Action: Provide comments for consideration by the SEC-IAC in its role as the Commission’s advisor. Submit via online form or email. Deadline: December 3, 2025, so the Committee can review your comments prior to the meeting.
Rulemaking Petition to Enable SVI: Background
Retail shareholders own approximately 30% of the U.S. equity markets but cast only 10–15% of votes in corporate elections. This is due to procedural burdens, not a lack of interest. In contrast, institutional investors vote over 90% of their shares, enabled by fiduciary frameworks and codified voting policies under Advisers Act Rule 206(4)-6.
All retail investors and issuers are constrained by Exchange Act Rule 14a-4, which requires meeting-specific proxies and prohibits retail investors from using standing voting instructions beyond a single year. In contrast, institutional investors establish voting policies that apply across issuers and annual meeting cycles.
For additional background, see Remarks by Jill Fisch Before the Investor Advisory Committee of the U.S. Securities and Exchange Commission, which primarily counters “pass-through” voting by large funds. While she opposes pass-through voting, she supports SVI for retail shareholders.
Rulemaking Petition to Enable SVI: Problem Statement
Exxon’s auto‑voting program for retail shareholders, deemed permissible by the SEC this year in a no-action letter, invites Exxon investors to “opt in” so their shares are automatically voted in line with management recommendations. The proxy is granted in perpetuity unless withdrawn by the shareholder. This is inconsistent with the requirements of Rule 14a-4(d)(3), which provides that “no proxy shall confer authority […] To vote with respect to more than one meeting (and any adjournment thereof).” 17 CFR 240.14a-4.
For that reason, the Exxon no-action letter has been controversial, and the resulting Exxon program has led to the lawsuit against Exxon filed on October 14, 2025 by the City of Hollywood Police Officers Retirement System v. Darren Woods.
If the SEC is to grant issuers an opportunity to secure such durable proxies, it would require rulemaking, and, in fairness, the right of retail investors to issue standing voting instructions that are not automatically aligned with management positions.
The SEC-IAC should delineate and recommend to the Commission the structural hallmarks of an acceptable voting program to avoid a fractured, confusing landscape.
Rulemaking Petition to Enable SVI: Proposal
I propose that the IAC encourage the Commission to adopt a rule allowing retail shareholders to:
- Opt-in to Standing Voting Instructions for recurring proxy matters.
- Use intermediaries of their own choosing (e.g., As You Vote, Bowyer Research, Broadridge, Iconik, National Center for Public Policy Research, Tumelo, or similar platforms).
- Specify preferences (e.g., vote with a policy template created by the investor or their chosen intermediary).
- Reaffirm or update instructions annually or upon material changes.
- Override or customize votes for any meeting or issue.
- Receive confirmation of vote execution and access to records.
Votes would be executed only after the definitive proxy statement is delivered, preserving the requirement for informed consent.
Rulemaking Petition to Enable SVI: Expected Benefits
The following benefits would be even more pronounced at companies owned primarily by retail investors, such as small- and micro-caps, meme stocks, ADRs, dividend payers, and de-indexed companies.
- Increased retail voting participation,
- improved corporate governance by increasing retail shareholder participation, reducing agency costs, fostering broader accountability, and improving the legitimacy of governance outcomes
- Higher quorum rates and fewer adjourned meetings
- Enhanced investor engagement and democratic legitimacy
- Lower costs for issuers and proxy solicitation firms
Rulemaking Petition to Enable SVI: Conclusion
SEC authority under Section 14 of the Exchange Act authorizes the SEC to modernize proxy rules.
The SEC should modernize the proxy voting system to enable retail investors to participate on equal footing with institutions and issuers in making their year-to-year voting preferences clear. I urge the SEC-IAC to recommend formal rulemaking authorizing Standing Voting Instructions through intermediaries of the shareholder’s choice, subject to clear procedural safeguards.
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