On January 23, 2026, the Securities and Exchange Commission’s Division of Corporation Finance (“CorpFin”) published new and revised Compliance and Disclosure Interpretations (“C&DIs”) relating to the SEC’s M&A, proxy and tender offer rules. The SEC staff thus continued a pattern from 2025 of introducing more flexibility for public companies and their management without the Commission’s undertaking notice-and-comment rulemaking. As noted below, these interpretative changes mesh with 2026 policy shifts by the Commission, SEC Chairman Paul Atkins, and staff to alter the balance in the relationship between management and shareholders.
And the staff may be far from finished. On a panel at the annual January Northwestern Securities Regulation Institute in January 2026, CorpFin Associate Director for Specialized Disclosure Ted Yu welcomed public company feedback on where additional interpretative flexibility or formal rule changes regarding tender offers might be beneficial.
The following summarize the nature and implications of the higher profile January 2026 CorpFin C&DIs:
1. CorpFin expands circumstances where agreements by target stockholders to support an M&A transaction that uses securities as acquisition consideration may be put in place in advance of filing a registration statement on S-4 or F-4
A decision by target stockholders to vote for or consent to a merger that includes securities in the acquisition consideration or to tender into an exchange offer (i.e., a third-party tender offer where the consideration consists of debt or equity securities of the acquiror) is an investment decision that requires the prior receipt of a prospectus contained in a registration statement on Form S-4 or F-4, or an exemption from registration. A decision to enter into an agreement to vote for or consent to such a merger, as well as an agreement to tender into such an exchange offer (collectively, “Lock-up Agreements”), raises the same concern. Before the new C&DI’s, the SEC staff had permitted Lock-up Agreements only in limited circumstances. Now those circumstances have been clarified and broadened.
Before the new C&DIs, the SEC permitted Lock-up Agreements to be entered into prior to filing a registration statement for the transaction only if (1) the Lock-up Agreements were only from directors, executive officers, affiliates, founders and their family members, and 5% holders, of the target company (the “Target Insiders”), (2) the persons signing these Lock-up Agreements owned less than 100% of the voting securities of the target, (3) votes would be solicited from target stockholders who did not sign Lock-up Agreements and (4) a prospectus contained in a Form S-4 or F-4 would be delivered to all target shareholders (the “Lockup Conditions”). If Lock-up Agreements were signed when these Lockup Conditions were not met, then no acquiror securities to be issued in the merger or exchange offer were permitted to be covered by a registration statement on Form S-4 or F-4. However, if the Lock-up Conditions were met, then all the acquiror securities, even those going to the Target Insiders that signed Lock-up Agreements, were permitted to be covered by the S-4 or F-4.
The old C&DIs provided further that, if a target holder signed an actual written consent to (as opposed to an agreement to vote for, consent to or to tender into) a transaction before the filing of an S-4 or F-4, then the consent did not violate the Securities Act so long as the Lockup Conditions were met, the issuance of acquiror securities to the signatory of the consent qualified for an exemption from registration, and the securities to be received by the signatory of the consent were excluded from the Form S-4 or F-4.
Under the new C&DIs, the same regime applies where the Lock-up Conditions are met. But the SEC now permits Lock-up Agreements and consents to such transactions when the Lock-up Conditions are not satisfied. Target stockholders that do not qualify as Target Insiders may now sign Lock-up Agreements and written consents to such transactions before the filing of an S-4 or F-4 so long as the securities they will be receiving in the transaction are excluded from any S-4 or F-4 that will eventually cover the securities being issued to the other target stockholders in the transaction and so long as they receive securities in the merger or exchange offer pursuant to an exemption from registration. Thus, for example, a 4.9% non-insider holder is now permitted to sign an agreement to vote for an all- or part-stock merger so long as the issuance of acquiror stock to such holder in the merger will qualify as a good private placement. Accordingly, if this non-insider target stockholder qualifies as an “accredited investor” and the disclosure and other requirements for a private placement are satisfied, then this target stockholder, even though not a Target Insider, may sign a voting agreement before the filing of the S-4 or F-4 and receive the stock consideration. Although the wording of the C&DI appears more narrow (permitting such flexibility only for Target Insiders when the Lockup Conditions are not met), we understand that the SEC staff will permit such flexibility in the case of any and all target shareholders whose receipt of securities in the merger or exchange offer qualifies for a private placement or other exemption from registration.
The C&DI’s note further that care must be taken that the solicitation broadly of Lock-up Agreements for exchange offers does not, unto itself, constitute a tender offer.
This flexibility to focus on exemptions from registration, rather than only on the satisfaction of the Lock-up Conditions, when obtaining Lock-up Agreements or written consents at the time of signing up a definitive M&A agreement will enhance the ability of acquirors to obtain support for transactions while also preserving their ability to offer the non-locked up target shareholders immediate liquidity at the closing of the transaction.
Similarly, in an issuer’s registered debt exchange offer for its own securities, historically a company could obtain Lock-up Agreements prior to filing a registration statement for the exchange offer only if (1) the Lockup Agreements were executed only by accredited investors, (2) the persons signing Lockup Agreements owned less than 100% of the applicable notes, (3) a tender was made to all holders of the notes and (4) all noteholders received the same amount and form of consideration (the “Issuer Exchange Offer Lockup Conditions”).
If the Issuer Exchange Offer Lockup Conditions were not satisfied, the issuer could not file a registration statement covering any of the securities being offered in the issuer exchange offer. If the Issuer Exchange Offer Lockup Conditions were satisfied, the issuer could file a registration statement covering all the securities being offered in the issuer exchange offer, including those going to the signatories of the Lock-up Agreements.
The SEC’s new C&DI broadens this interpretation to cover issuer exchange offers for the issuer’s debt or equity securities, expands item 1 of the Issuer Exchange Offer Lockup Conditions to apply to not only accredited investors but also QIBs, and most significantly eliminates the blanket prohibition on use of a registration statement if the Issuer Exchange Offer Lockup Conditions are not satisfied. The C&DI provides that when Lock-up Agreements are executed before the filing of a registration statement where the Issuer Exchange Offer Lockup Conditions listed above are not satisfied, then the issuer must take advantage of a private placement exemption from registration for the issuance of securities in the issuer exchange offer to the offerees that signed Lock-up Agreements, and may register on Form S-4 or F-4, as applicable, all the securities being concurrently offered in the issuer exchange offer to securityholders who did not execute Lock-up Agreements.
As in the case of business combinations, this flexibility for issuer exchange offers to focus on exemptions from registration, rather than only on the satisfaction of the Issuer Exchange Offer Lock-up Conditions, when obtaining Lock-up Agreements or written consents prior to launching an issuer exchange offer, will enhance the ability of issuers to obtain support for transactions while also preserving their ability to offer their non-locked up shareholders or noteholders immediate liquidity at the closing of the transaction.
2. In a merger or exchange offer, when shares are issued on a private placement basis to target shareholders who sign Lock-up Agreements in accordance with the SEC’s new position described above, the SEC will permit such privately placed shares received in the merger or tender offer to be registered for immediate resale via the Form S-4 or F-4 which registers the securities being issued in the merger or exchange offer to the target shareholders who did not sign Lock-up Agreements
What is the “problem” CorpFin seeks to address?
CorpFin’s historical position has been that, in a merger or exchange offer, if officers and directors of a target were issued acquiror share consideration on a private placement basis, then the acquiror could not subsequently register those shares for resale on the S-4 registration statement that covered the acquiror shares issued to non-affiliate target shareholders. CorpFin explained that such S-4 registration statement could not include the acquiror shares issued to such target officers and directors because those shares were issued in a private placement transaction that was distinct from the merger or tender offer covered by the Form S-4.
However, as described above, in a series of new C&DI’s (Securities Act Sections C&DI’s 139.29, 139.30, and 239.13), CorpFin has now provided that, where the special Lockup Conditions are not satisfied, any and all target shareholders that sign Lockup Agreements for a merger or exchange offer involving acquiror stock consideration may receive the acquiror share consideration in a private placement, while the acquiror shares going to the target shareholders that do not sign the Lockup Agreements may be covered by a registration statement on Form S-4 or F-4. CorpFin’s historical position prohibited the resale of the acquiror shares received in such private placements from being covered by a registration statement on Form S-4 or F-4. This position added uncertainty relating to the ability of these target shareholders to be able to freely trade their newly received acquiror shares following the consummation of the business combination transaction. Acquirors had to wait until the transaction closed and then file a resale registration statement (typically on Form S-3 or F-3, subject to eligibility requirements) to cover these resales by the target shareholders that received privately placed acquiror stock in the merger or exchange offer.
What did CorpFin do?
Revised C&DI 225.03 addresses this problem. In revised C&DI 225.03, the SEC provides that the acquiror may register for resale on an S-4 registration statement shares issued to officers, directors and affiliates on a private placement basis in a business combination (e.g., shares issued to target insiders in connection with the execution of written consents or lock-up agreements described in C&DI’s 139.29, 139.30, and 239.13 discussed above). Although the text of the C&DI refers only to resales by target insiders, we believe that the staff will permit the S-4 or F-4 registration statement to cover the post-transaction resales by any and all target shareholders that received acquiror stock on a private placement basis in the merger or exchange offer. Notwithstanding that these shares were issued on a private placement basis, CorpFin stated that the acquiror may register the resale of these shares on the merger or exchange offer Form S-4 or F-4 because the acquiror issued the shares in the business combination to which the S-4 or F-4 registration statement relates. Further, once the acquiror consummates the business combination, the acquiror may file a post-effective amendment to the Form S-4, converting the Form S-4 to a Form S-3 resale registration statement, which will continue to register the resale of the shares issued in the private placements.
How do public companies benefit?
Revised C&DI 225.03 enables acquirors to provide target shareholders with greater liquidity in situations where a failure to comply with the Lock-up Conditions results in the issuance of acquiror shares to some of the target shareholders on a private placement basis in a merger or exchange offer.
3. CorpFin relaxes the 20 business day rule for “broker searches” in connection with shareholder meetings
What is the “problem” CorpFin seeks to address?
Current proxy rules (Rule 14a-13 and Rule 14c-7(a)(3)) generally require that public companies commence “broker searches” at least 20 business days prior to the record date of a shareholder meeting in order to determine how many copies of proxy materials must be distributed to beneficial owners of the company’s voting securities. Under Rule 14a-13, the 20-business day requirement is mandatory for annual meetings, with flexibility provided for special meetings. In a new C&DI, CorpFin staff acknowledged that technological changes enable companies to make inquiries of brokers, banks, and other intermediaries in a more condensed time frame.
CorpFin’s action may also have been animated by two additional dynamics: (a) a belief that compliance with the 20-business day requirement was uneven given that technology had obviated the need for searches to take that long, and (b) strategic use by activist investors and hostile offerors engaged in a proxy contest who are tactically looking to delay a shareholder meeting. In this latter dynamic, activists and hostile bidders could send a bedbug letter to the SEC staff saying that 14a-13 was not complied with, and often (but not always) the staff would require the company to postpone the meeting to ensure compliance.
What did CorpFin do?
According to new C&DI 133.02, “the staff will not object if a registrant commences its “broker search” less than 20 business days before the record date of the shareholder meeting, provided that the registrant reasonably believes that its proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13.”
How do public companies benefit?
The requirement to commence a broker search at least 20 business days prior to the record date for a shareholder meeting had, in certain situations, increased the time required to hold a public company shareholder meeting. Companies seeking to approve a business combination, or seeking urgent approvals required because of company distress, have often found that the 20-business day requirement caused delay for the matters for which they sought approval. The flexibility provided by this C&DI will alleviate that problem in the future. We expect that proxy solicitors will be readily providing comfort to clients that considerably shorter periods are sufficient to ensure a proper broker search has been conducted.
4. CorpFin cracks down on voluntary Notices of Exempt Solicitation
What is the “problem” CorpFin seeks to address?
CorpFin expressed concerns that voluntary Notices of Exempt Solicitation are being used for publicity. In revised C&DI 126.06, CorpFin staff observe that “the vast majority of Notices of Exempt Solicitation are now voluntary submissions by persons who do not beneficially own more than $5 million of the class of subject securities, and the voluntary submission of such notices on EDGAR appears to be primarily a means to generate publicity.” In practice, these are often used by shareholder proponents or those who support shareholder proposals related to ESG matters and a significant number of these notices originate from a concentrated number of individuals or groups.
Under Exchange Act Rule 14a-6(g)(1), these Notices of Exempt Solicitation must be filed by any person engaging in a solicitation pursuant to Exchange Act Rule 14a-2(b)(1) who beneficially owns over $5 million of the class of securities that is the subject of the solicitation. Immediately before this new C&DI, persons who owned less than this threshold amount could file a Notice of Exempt Solicitation on a voluntary basis. (This was thanks to an earlier version of the C&DI issued in 2018 that stated the staff would not object to voluntary filings. This earlier position was actually intended to yield some benefits for public companies in that it made certain activist views more public and centralized, to which a company could theoretically respond more easily. However, ESG activist adaptation to the earlier version of the C&DI led to CorpFin’s 2026 response.)
CorpFin now appears concerned that these voluntary Notices are being abused to disseminate views about the relevant company through the SEC’s EDGAR system.
What did CorpFin do?
In revised C&DI 126.06, CorpFin staff reversed from “not objecting” to “objecting” to voluntary Notices of Exempt Solicitation. When the staff writes that it “will object to a voluntary submission of a Notice of Exempt Solicitation,” it is using the strongest language short of threatening to recommend an enforcement action.
How do companies benefit?
This new position will curb the ability of shareholders with smaller shareholdings to express views about the relevant company through voluntary Notices of Exempt Solicitation on EDGAR.
5. CorpFin clarifies two circumstances where purchases outside the tender offer will be permitted in Tier I and Tier II cross-border tender offers
What is the “problem” CorpFin seeks to address?
Rule 14e-5 generally prohibits a person making a tender offer from purchasing the subject securities outside the tender offer. However, Rule 14e-5 provides limited exceptions to this rule for cross-border tender offers that qualify for the SEC’s Tier I and Tier II tender offer exemptions. Two new C&DI’s address two specific issues which have arisen in Tier I and Tier II cross-border tender offers where companies seek to purchase subject securities outside the tender offer in accordance with Rule 14e-5.
What did CorpFin do?
First, new C&DI 166.02 extended the Rule 14e-5(b)(10) exemption to Rule 14e-5 for purchases outside a Tier I cross-border tender offer made after public announcement of the offer but prior to dissemination of the offer documents.
Rule 14e-5(b)(10) permits an offeror to make purchases of a target’s shares outside of the tender offer if the tender offer is eligible for Tier I relief, so long as certain conditions are satisfied. One of those conditions is that offering documents furnished to U.S. holders must “prominently disclose the possibility of any purchases [outside the tender offer], or arrangements to purchase, or the intent to make such purchases.” This raises the question whether purchases outside the tender offer can be made prior to dissemination of these offering documents.
New C&DI 166.02 clarifies that this exception also applies to purchases made in connection with a transaction eligible for Tier I cross-border tender offer relief, after announcement of the transaction but prior to launch of the tender offer (and therefore prior to dissemination of tender offer documents disclosing that such purchases may occur). The CDI explains that this position is consistent with the policy behind the Rule 14e-5(b)(10) exception, i.e., “to allow purchases outside of a Tier I tender offer where such outside purchases are permitted by the laws of the subject company’s home jurisdiction and the other conditions of the exception are met.” C&DI 166.02 notes that the “offering documents, when disseminated, should disclose that purchases outside the Tier I offer have already occurred and, if true, may continue during the offer.” The C&DI also notes this relief also applies to the exception under Rule 14e-5(b)(12)(i)(D) for purchases outside of a Tier II tender offer by an affiliate of the offeror’s financial advisor or by an offeror and its affiliates.
Second, new C&DI 166.03 clarifies the Rule 14e-5(b)(12) exception to Rule 14e-5 for purchases outside a Tier II tender offer by affiliates of the offeror’s financial advisor who makes purchases as agent for the offeror.
Rule 14e-5(b)(12)(i) permits an offeror (and its affiliates) and an affiliate of the offeror’s financial advisor to make purchases of target shares outside a tender offer eligible for Tier II relief, subject to certain conditions and prohibitions. One of the conditions, set forth in Rule 14e-5(b)(12)(i)(G)(4), states that the purchases or arrangements to purchase subject securities by an affiliate of the offeror’s financial advisor outside the tender offer may not be made to facilitate the tender offer. New C&DI 166.03 clarifies that this (G)(4) prohibition does not apply when an affiliate of the offeror’s financial advisor purchases target shares on behalf of the offeror. In other words, the limitation that purchases outside a tender offer by an affiliate of the offeror’s financial advisor may not facilitate the tender offer only applies when such affiliate is purchasing outside the tender offer on its own behalf (or for any other reason except at the direction of the offeror). The C&DI does note that these financial advisor purchases acting as “agent-of-the-offeror” would still “be subject to the other requirements of Rule 14e-5(b)(12), including Rule 14e-5(b)(12)(F), which requires that the tender offer price be increased to match any consideration paid outside of the tender offer that is greater than the tender offer price.”
How do companies benefit?
These new C&DIs inject additional flexibility into cross-border and foreign tender offers.
