On January 23, 2026, the Staff of the Securities and Exchange Commission (“SEC”) issued updated guidance regarding the timing of broker searches under the proxy rules. Specifically, CDI Question 133.02 indicates that the Staff will not object to registrants that conduct broker searches less than 20 business days before the record date for annual and special shareholder meetings, provided they reasonably believe that proxy materials will be timely disseminated to beneficial owners and otherwise comply with Rule 14a-13 of the Securities Exchange Act of 1934. Prior to this CDI guidance, the timing requirement for conducting broker searches could delay shareholder meetings, including special meetings to approve M&A transactions where speed to closing is important.

New CDI on Broker Searches

The purpose of the broker search process is to allow brokers, banks, and other nominees to determine how many copies of proxy materials are needed to distribute to the beneficial owners of a company’s shares. Under Rule 14a-13(a)(3), companies are required to initiate broker searches at least 20 business days before the record date for the meeting. The rule provides an exception for special meetings where making the 20-business day inquiry is “impracticable,” but there is little guidance on what the Staff would consider to be “impracticable.”

As a result, the broker search card rule necessitates advance planning to comply with Rule 14a-13, state corporation laws, and corporate charters and bylaws that govern record dates, notices to stockholders, and meeting dates. For example, if a record date is set too early, it will become stale after a period of time (e.g., 60 days under Delaware law). That can happen due to a prolonged SEC review of a Form S-4 registration statement or a preliminary proxy statement. In that situation, a company might have to conduct one or more new broker searches—effectively, rolling record dates—if it wants to be able to convene the special meeting as promptly as possible after clearing the Staff’s review. Alternatively, waiting too long to set a record date could result in delaying the mailing of proxy materials and holding the meeting due to the 20-business day broker search process. Activists and hostile bidders have even weaponized Rule 14a-13 as a tool to delay a shareholder vote by complaining to the SEC when companies did not comply, even if banks and brokers have ample time to respond.

The broker search rule was adopted in 1986—a year before the movie Wall Street came out. Since then, technological and administrative advancements have made it much easier for banks, brokers, and other nominees to consult their customer records and communicate with companies. As a result, a 20-business day period has long been unnecessary.

Under the new CDI guidance, “the staff will not object if a registrant conducts its ‘broker search’ less than 20 business days before the record date, provided that the registrant reasonably believes that its proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13.” The guidance acknowledges technological advancements that have streamlined the broker search process, often allowing completion in far fewer than 20 business days. This change is expected to reduce the administrative burden and offer greater flexibility in managing proxy material distribution and the overall meeting calendar. The guidance also applies to Rule 14c-7(a)(3) regarding information statements for written consents.

Practical Takeaway

Companies will have more leeway in scheduling and preparing for shareholder meetings. This flexibility is particularly beneficial when seeking shareholder approval of M&A transactions, where timing and coordination are critical. Effectively, the new guidance will enable some transactions to close more quickly by allowing the record date to be set sooner, thus reducing the parties’ exposure to market risk. It may also be helpful for companies seeking to set a record date quickly to reduce the risk that activists or other interlopers try to purchase shares after the transaction is announced for the purpose of voting against it.

The CDI is also a welcome step by the Staff in terms of modernizing the proxy process. Proxy solicitors and practitioners have long viewed the 20-business day requirement as antiquated and unnecessary. Parties should consult with their proxy solicitors and Broadridge when conducting a broker search, however, to determine what will be adequate.

The CDI, of course, is merely the Staff’s interpretation, so there may be additional rulemaking on this topic. Parties must also ensure compliance with all other aspects of Rule 14a-13.