The Advisors' Blog

We’re entering the “off-season” shareholder engagement window for calendar-year companies. This Compensia alert notes that you may receive more candid feedback during your engagement meetings this year due to three Corporation Finance Interpretations (CFIs) that the Corp Fin Staff issued in September of this year, which we covered on TheCorporateCounsel.net.

In September 2026, the SEC’s Division of Corporation Finance issued three new Corporation Finance Interpretations (“CFIs”) clarifying when a shareholder seeking to report beneficial ownership on Schedule 13G (used by “passive investors” not seeking to influence control) can engage with an issuer without losing their 13G eligibility.

The CFIs mitigate the uncertainty arising from the SEC’s February 2025 guidance on the same topic. Institutional investors may participate in off-season engagements, including discussions regarding executive compensation, without undue concern that such engagement will compromise their eligibility to report on Schedule 13G.

The memo also notes that direct, specific feedback matters more than ever as asset managers’ voting decisions increasingly diverge from the major proxy advisors’ recommendations. Teeing up questions may set you up for success.

The new CFIs underscore that the context of an engagement matters when determining whether a shareholder holds issuer securities with a disqualifying purpose or effect of influencing “control” of the issuer. While the determination ultimately depends on all relevant facts and circumstances, the CFIs give issuers and shareholders a clearer sense of when engagements can take place without jeopardizing a shareholder’s Schedule 13G eligibility.

One important factor is the initiation of the engagement:

If an issuer initiates a meeting to understand a Schedule 13G investor’s views or voting decisions on past matters or on matters likely to be submitted for a vote at an upcoming shareholder meeting, the shareholder’s participation in that discussion does not, on its own, disqualify it from reporting on Schedule 13G. Most notably, the SEC Staff indicates that an issuer-initiated conversation, or a response to an issuer’s request to understand a past vote, is less likely to reflect an attempt by the investor to influence control.

Finally, check out this blog from a few weeks ago for specific suggestions on making the most of your off-season engagement.

– Meredith Ervine