(Article from Registered Funds Regulatory Update, April 2026)
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The NYSE and Cboe BZX Exchange recently withdrew applications filed with the SEC pursuant to Rule 19b-4 under the Exchange Act seeking to exempt listed CEFs from the requirement to hold annual shareholder meetings.
In June 2024, the NYSE filed an application with the SEC seeking to amend Section 302.00 of the NYSE Listed Company Manual, which requires listed CEFs to hold annual shareholder meetings in each fiscal year, to exempt NYSE-listed CEFs from the annual shareholder meeting requirement. The application was ultimately withdrawn, revised and resubmitted in June 2025. The revised application narrowed the initial proposal so that only newly NYSE-listed CEFs would be exempt from the annual shareholder meeting requirement, leaving any already listed CEFs subject to the annual meeting requirement. The June 2025 application also would have permitted exempt CEFs to voluntarily include annual shareholder meetings in their bylaws if they chose to do so.
In May 2025, Cboe BZX Exchange filed a similar application with the SEC seeking to exempt CEFs listed on the exchange as of or after May 20, 2025, from the annual shareholder meeting requirement set forth in BZX Exchange Rule 14.10(f). The application also included an option for exempted CEFs to voluntarily include annual shareholder meeting requirements in their own bylaws if they chose to do so.
The applications noted that annual shareholder meeting requirements stem only from exchange listing rules, not the 1940 Act, which provide adequate mechanisms to protect CEF shareholder interests. The applications also noted that removing this requirement would help protect against the harms posed by activist investors, which have increasingly targeted CEFs. Furthermore, the applications noted that retail shareholders, those of most concern, show minimal participation in these meetings and emphasized that the proposed rule would not take away any existing shareholder rights because it would only apply to newly-listed CEFs.
In September 2025, the SEC instituted proceedings to determine its findings on the proposed rule change based on each application. In December 2025, the SEC extended the period for consideration to February 2026. However, BZX and NYSE withdrew their applications in December 2025 and January 2026, respectively.
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Withdrawal of a Proposed Rule Change Amending Section 302.00 of the NYSE Listed Company Manual To Exempt Closed-End Funds Registered Under the Investment Company Act of 1940 From the Requirement To Hold Annual Shareholder Meetings, Release No. 34-104548 (Jan. 6, 2026), available at: https://www.federalregister.gov/documents/2026/01/09/2026-00217/self-regulatory-organizations-new-york-stock-exchange-llc-notice-of-withdrawal-of-a-proposed-rule.
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Withdrawal of a Proposed Rule Change To Exempt Closed-End Management Investment Companies Registered Under the Investment Company Act of 1940 That are Listed as of or After May 20, 2025 From the Annual Meeting of Shareholders Requirement Set Forth in Exchange Rule 14.10(f), Release No. 34-104447 (Dec. 23, 2025), available at: https://www.federalregister.gov/documents/2025/12/23/2025-23672/self-regulatory-organizations-cboe-bzx-exchange-inc-notice-of-withdrawal-of-a-proposed-rule-change.