The Securities and Exchange Commission has the authority to eliminate abolish shareholder proposals, though insurgent investors would likely challenge such a move, explained Brian Breheny, partner and co-head of the SEC reporting and compliance practice at Skadden, Arps, Slate, Meagher & Flom LLP.

“Could they eliminate 14a-8 shareholder proposals? I think the answer is yes,” Breheny said on the Activist Investing Today podcast. “There isn’t anything preventing the SEC from changing its mind and saying, ‘We thought that having these rules at certain percentages was right and now it’s no longer right.'”

In a conversation about the securities regulator’s expected shift under recently installed SEC Chairman Paul Atkins, Breheny said the agency would likely get hit with a legal challenge if it sought to end shareholder proposals.

Before joining Skadden, Breheny held several leadership positions in the SEC’s Division of Corporation Finance, including as chief of the Office of Mergers and Acquisitions, as well as deputy director, legal and regulatory policy in the division.

On the podcast, Breheny talked about his expectations for short-sale disclosure rules that the agency recently postponed; and why he thinks a long-languishing proposal on derivatives reporting likely will never be adopted.

He also discussed controversial new guidance affecting how index funds communicate with corporations and why recently approved Texas legislation requiring shareholders to own $1 million or 3% of a company’s voting securities to submit shareholder proposals at companies headquartered or incorporated in the Lone Star State doesn’t conflict with SEC rules.

Check out the podcast with Brian Breheny:

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