SEC Opens Proceeding on Texas Stock Exchange Proxy Voting Rule Change
The order subjects TXSE members to a mandatory vote allocation process for uninstructed shares, with a decision due by September 9 2026.
On September 8 2026 the Securities and Exchange Commission issued an order instituting proceedings under Section 19(b)(2)(B) of the Securities Exchange Act to determine whether to approve or disapprove Texas Stock Exchange LLC's proposed amendment to Exchange Rule 13.003. The filing, identified as Release No. 34-106292 and File No. SR-TXSE-2026-008, follows the Exchange's May 28 2026 submission and the June 11 2026 notice of proposed rule change published in the Federal Register. The Commission designated a longer action period on July 21 2026 and set September 9 2026 as the deadline for a final decision.
Rule 13.003(b) presently bars a Member from proxy voting unless the Member is the beneficial owner, acts on written instructions, or follows the rules of a national securities exchange with clear procedural records. The Exchange proposes to amend the rule by adding a mandatory process for "Covered Members" to vote shares held without voting instructions - the "Uninstructed Shares." Under the proposal, a Covered Member must submit a proxy for those shares and allocate votes on each ballot item in proportion to the aggregate instructions received from beneficial owners who did provide directions as of the defined "Calculation Date."
If no instructions are received for a particular proposal, the Covered Member must vote all Uninstructed Shares as ABSTAINING. The proportional allocation is described as a ministerial obligation, precluding any discretion by the Member. Exclusions apply to shares held in fiduciary, executor, trustee, ERISA plan manager, or designated investment adviser capacities, which are omitted from the calculation.
The amendment also requires Covered Members to retain records of the allocation methodology in accordance with Exchange Act Rule 17a-4 and retains the existing prohibition on proxy voting for director elections, executive compensation, or other significant matters without explicit beneficial-owner instructions. Comment letters on the proposal are available at the SEC's public-comments website.
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