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THE FACTS
- On 21 June 2024, the NYSE filed SR‑NYSE‑2024‑35 to exempt closed‑end funds from holding annual shareholder meetings.
- The SEC instituted proceedings on 4 October 2024 amid extensive public comment and governance concerns.
- On 31 January 2025, the NYSE formally withdrew the proposal (SEC Release No. 34‑102324). You can view the NYSE release here.
- The annual meeting requirement remains in effect for all existing closed‑end funds under current NYSE listing rules.
OUR TAKE
The NYSE’s decision to withdraw its proposal reflects the strong preference among shareholders and regulators to preserve annual meetings as a core governance mechanism. Rather than eliminate this requirement outright, future rule‑change efforts should address investor expectations around shareholder oversight. Fund boards and their advisors can view this outcome as confirmation that annual meetings continue to play an important role in fund governance and any subsequent amendments to listing standards will need to balance operational efficiency with shareholder rights.
Views on the News provides concise, insightful analysis of fund governance, proxy issues, and activist trends— giving fund managers and boards the clarity they need to make informed decisions.
Summary
The New York Stock Exchange withdrew its proposal to remove the annual meeting requirement for closed-end funds on January 31, 2025, after significant public debate and SEC review. The proposal, originally filed in June 2024, received substantial feedback from investors and governance professionals, prompting SEC proceedings in October 2024. Withdrawing the proposal, the NYSE confirmed that closed-end funds must still hold annual shareholder meetings. The decision reflects the preference of shareholders and regulators to preserve annual meetings as a key governance mechanism. Future rule changes will likely focus on balancing operational efficiency with shareholder rights, reinforcing the ongoing importance of annual meetings in fund governance.
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