Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Register for Our 2017 Proxy Season Update Webinar

Posted in SEC/Corporate

On Thursday, December 8 at 12:00 p.m. (CT), please join Katten Muchin Rosenman LLP, Ernst & Young LLP and Sard Verbinnen & Co. for a webinar discussion of key developments and trends impacting public companies in the 2017 annual report and proxy season.

Further details are available here; click here to register.

ISS Releases 2017 Proxy Voting Guideline Updates

Posted in SEC/Corporate

On November 21, ISS published its 2017 Proxy Voting Guideline Updates, which will be in effect for meetings held on or after February 1, 2017. The US 2017 updates cover numerous policies, with significant changes summarized below:

Restricting Binding Shareholder Proposals

ISS introduced a new policy to recommend against or withhold from members of the governance committee if a company’s charter imposes undue restrictions on shareholders’ ability to amend its bylaws. Such restrictions include outright prohibition on the submission of binding shareholder proposals, or share ownership requirements or time holding requirements in excess of SEC Rule 14a-8. Continue Reading

Glass Lewis Releases 2017 Proxy Season Guidelines

Posted in SEC/Corporate

On November 18, Glass Lewis released its 2017 U.S. Proxy Season Guidelines. The guidelines are a detailed overview of the key policies Glass Lewis applies when analyzing individual companies and are formally updated on an annual basis.

One of the more significant changes to the Glass Lewis Guidelines is the director overboarding policy. Under this policy, Glass Lewis will generally recommend voting against a director who serves as an executive officer of any public company while serving on a total of more than two public company boards, and against any other director who serves on a total of more than five public company boards. Glass Lewis may consider factors such as the size and location of the other companies where the director serves on the board, the director’s board roles at the companies in question, whether or not the director serves on the board of any large privately held companies, the director’s tenure on the boards in question, and the director’s attendance record at all companies. Glass Lewis may refrain from recommending against certain directors if the company provides sufficient rationale for their continued board service. Continue Reading

SEC Division of Corporation Finance Issues New C&DIs Relating to Tender Offer Rules

Posted in SEC/Corporate

On November 18, the Division of Corporation Finance of the Securities and Exchange Commission issued seven new Compliance and Disclosure Interpretations (C&DIs): 1) two new C&DIs with respect to the tender offer rules under Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14D; and 2) five new C&DIs with respect to the tender offer rules under Section 14(e) of the Exchange Act and Regulation 14E.

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SEC Division of Corporation Finance Issues C&DIs on Offerings Under Regulation A and Regulation D

Posted in SEC/Corporate

On November 17, the staff of the Division of Corporation Finance of the Securities and Exchange Commission issued four new Compliance and Disclosure Interpretations (C&DIs), three of which relate to offerings under Regulation A and one of which relates to offerings under Regulation D under the US Securities Act of 1933 (the “Securities Act”). Continue Reading

CBOE Files Proposal To Amend Priority Rules

Posted in Broker-Dealer

On November 22, the Chicago Board Options Exchange, Inc. (the “Exchange” or CBOE) filed a proposal to amend CBOE Rules 6.45A, 6.45B and 6.73, specifying that, for transactions between floor brokers and market makers, the “initiator” of an order is the party responsible for ensuring that transactions are executed in accordance with open outcry priority and allocation requirements and trade-through prohibitions. The Exchange’s current rules and interpretations regarding responsibility for trade-throughs were considered ambiguous, and the Exchange has taken the position in enforcement actions that all parties to a trade are liable for any trade-through violation. The filing specifically states that in a typical open outcry transaction, it is the floor broker representing an order and requesting quotes from market makers in the trading crowd. In that circumstance, the floor broker will be deemed to have initiated the transaction. Continue Reading

CFTC Issues No-Action Relief Relating to Risk Disclosure Statements for Non-Institutional Customers

Posted in CFTC, Derivatives

On November 30, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight granted no-action relief for futures commission merchants (FCM) and introducing brokers (IB) consolidating risk disclosure statements sent to non-institutional customers (customers that are not eligible contract participants).

CFTC regulations require an FCM or IB to provide each non-institutional customer with written risk disclosure statements before opening a customer’s account. The no-action letter clarifies that an FCM or IB may provide its non-institutional customers with the Futures Industry Association (FIA) Combined Risk Disclosure Statement in lieu of the separate disclosure statements the regulations require.

CFTC Staff Letter 16-82 is available here.

CFTC Staff Extends Time-Limited Swap Data Reporting Relief for Certain Foreign Swap Dealers and Major Swap Participants

Posted in CFTC, Derivatives

On November 21, the Commodity Futures Trading Commission Division of Market Oversight extended time-limited relief for certain registered swap dealers (SDs) and major swap participants (MSPs) from the swap data reporting rules set forth in Part 45 and Part 46 of the CFTC’s regulations. The relief is available to non-US SDs and non-US MSPs established in Australia, Canada, the European Union, Japan or Switzerland that are not a part of an affiliated group with a US parent entity that is an SD, MSP, bank, financial holding company or bank holding company.

The relief will expire on the earlier of 1) December 1, 2017; or 2) 30 days following the CFTC’s issuance of a comparability determination regarding the swap data reporting rules for the jurisdiction in which the non-US SD or non-US MSP is established.

CFTC Staff Letter 16-79 is available here.

CFTC Unanimously Approves Final Rule Amendments to Its Regulations Regarding CPO Financial Reports

Posted in CFTC

On November 21, the Commodity Futures Trading Commission announced unanimous approval of amendments to the required financial reports that a commodity pool operator (CPO) provides on each pool the CPO operates. The amendments contain provisions similar to the guidance previously provided through exemptive relief or no-action letters and include the following changes:

  • approved use of additional generally accepted accounting standards in annual reports, account statements, and in Form CPO-PQR;
  • relief from the annual report audit requirement for certain new pools with limited participants and contributions;
  • relief from the CPO annual report audit requirement if pool participants are exclusively specified insiders; and
  • clarification of the requirement to distribute an audited annual report at least once during the life of the pool.

The amendments will go into effect on December 27. The Federal Register notice is available here.

CFTC Extends Time-Limited No-Action Relief From the Clearing and Trade Execution Requirements for Certain Affiliated Counterparties

Posted in CFTC

On November 28, the Commodity Futures Trading Commission’s Division of Clearing and Risk (DCR) and Division of Market Oversight (DMO) each extended previously issued no-action relief from clearing and trade execution requirements for certain inter-affiliate transactions. As discussed in the November 20, 2015 edition of the Corporate & Financial Weekly Digest, DMO previously provided time-limited no-action relief exempting certain affiliates from the trade execution requirement. This relief is available to affiliate counterparties that satisfy CFTC regulation 50.52(a) but not 50.52(b), (c) or (d), and are not exempt from clearing. DMO has extended its relief to December 31, 2017. Continue Reading