In the ongoing war against Dodd-Frank, the detractors have notched another victory. Deciding a case brought by various business groups, a three-judge U.S. Court of Appeals for the District of Columbia panel unanimously nixed the so-called proxy access rule last week.

The rule was hailed as a milestone in the long battle by corporate governance and shareholder advocates to open up access to proxy ballots. The new rules among other things allowed large shareholders to place board nominees directly on company-controlled proxy ballots alongside the slate of candidates put forward by management. Previously, shareholders' groups that wanted to put forward candidates had to pay to create and distribute another ballot.

The requirement was controversial from the start, as companies complained that the measure would open the access to political interest in the form of unions, public pension funds and shareholder activists. The 3 judges, all Republican appointees, argued that the law was passed without due consideration given to the costs of compliance, that is, the high costs of fighting any alternative nominees, according to Reuters.

This is a big blow for institutional investors, most of whom were strong advocates for the rule.  The recent decision however leaves the door open for the SEC to reconsider the rule and put forward an new version. One issue for SEC commissioners and lawyers to consider is whether this measure has a chance at the Supreme Court. The knee-jerk answer would be that the current court would dump all over it, but you never know.

For more:
- here's a Reuters article

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