On November 2, the Securities and Exchange Commission voted to adopt a set of amendments (the Amendments) to “harmonize, simplify and improve the multilayer and overly complex exempt offering framework” to “promote capital formation and expand investment opportunities while preserving or improving important investor protections,” according to the SEC’s press release announcing the Amendments.
Continue Reading SEC Approves Amendments to Harmonize and Simplify Offering Exemptions

On October 16, the Securities and Exchange Commission adopted amendments (the Amendments) to its long-standing auditor independence rules. The Amendments, which largely mirror the amendments proposed in December 2019, reflect updates based on recurring fact patterns and related SEC staff consultations, respond to recent changes in capital market conditions and modify certain aspects of the auditor independence framework set forth in Rule 2-01 of Regulation S-X (Rule 2-01). Rule 2-01, among other things, requires auditors to be independent of their audit clients “both in fact and in appearance.” As previously described in the January 17, 2020 edition of Corporate & Financial Weekly Digest, Rule 2-01(b) sets forth the general standard for auditor independence, while Rule 2-01(c) provides an illustrative list of relationships and circumstances in which an accountant would not be considered independent, including certain financial, employment, business and other relationships between the auditor and the audit client.
Continue Reading SEC Adopts Amendments to Modernize Auditor Independence Rules

On August 26, the Securities and Exchange Commission adopted amendments to modernize the required disclosures under Regulation S-K regarding a company’s business description (Item 101), legal proceedings (Item 103) and risk factors (Item 105) (the Amendments). In a press release, the SEC staff noted that the Amendments are in line with the SEC’s long-standing commitment to a principles-based, registrant-specific approach to disclosure that, although prescriptive in some respects, focuses on materiality and is designed to provide an understanding of each registrant’s business, financial condition and prospects. The staff also noted that the Amendments are intended to result in disclosure that will be presented in a manner that is more readable because of the reduction of immaterial and/or repetitive disclosure and will also be more in line with the way that a registrant’s management and board of directors manage and assess the registrant’s performance. The Amendments reflect the adoption of rule amendments the SEC originally proposed in August 2019 (the Proposals), which were previously discussed in the August 16, 2019 edition of Corporate & Financial Weekly Digest, with certain modifications. The key changes made by the Amendments:
Continue Reading SEC Adopts Rule Amendments to Modernize Business, Legal Proceedings and Risk Factor Disclosures Required by Regulation S-K

On July 22, the Securities and Exchange Commission announced the adoption of amendments (the Amendments) to the SEC’s rules governing proxy solicitations that are intended to “facilitate the ability of those who use proxy voting advice — investors and others who vote on investors’ behalf — to make informed voting decisions without imposing undue costs or delays that could adversely affect the timely provision of proxy voting advice.” The Amendments represent a modified version of the amendments the SEC originally proposed in November 2019, which were previously discussed in the November 8, 2019 edition of Corporate & Financial Weekly Digest.
Continue Reading SEC Adopts Amendments and Issues Guidance Related to Proxy Voting Advice

Recently, the Securities and Exchange Commission issued a release (the Release) approving, with immediate effectiveness, the New York Stock Exchange’s (NYSE) proposal to extend through September 30 the NYSE’s temporary and partial waivers from the requirement that NYSE-listed companies obtain stockholder approval in connection with certain related party and 20 percent equity issuances (the Waiver).
Continue Reading SEC Approves Extension of Temporary NYSE Waiver of Stockholder Approval Rules

On May 4, the Securities and Exchange Commission’s  Division of Corporation Finance (the Division) issued four frequently asked questions (FAQs) related to the SEC’s conditional relief order (the Order) that was issued in the wake of the Coronavirus Disease 2019 (COVID-19).
Continue Reading SEC Division of Corporation Finance Issues Four FAQs Addressing the SEC’s Conditional Relief Order

As previously discussed in our March 26 advisory titled, “Virtual Shareholder Meetings in the Wake of COVID-19: Legal and Practical Considerations,” the Securities and Exchange Commission issued guidance to public companies on providing notice of a change to a virtual shareholder meeting in the wake of the coronavirus (COVID-19) pandemic.
Continue Reading Proposed Amendments to the Delaware General Corporation Law Concerning Virtual Shareholder Meetings During Emergency Conditions

On April 6, the Securities and Exchange Commission issued a release (the Release) announcing that the New York Stock Exchange (NYSE) had issued temporary and partial waivers from the requirement that NYSE-listed companies obtain stockholder approval in connection with certain related party and 20 percent equity issuances (the Waiver). In the Release, the NYSE acknowledged the “unprecedented disruption” caused by the COVID-19 pandemic and the great likelihood that many listed companies will “have urgent liquidity needs in the coming months due to lost revenues and maturing debt obligations,” which may mean that listed companies will “need to access additional capital that may not be available in the public equity or credit markets.” The Waiver provides NYSE-listed issuers with greater flexibility to engage in capital raising transactions, such as private investment in public equity (PIPE) transactions and registered direct offerings, that may otherwise be constrained by the NYSE’s existing stockholder approval rules. The Waiver remains in effect through June 30, 2020.
Continue Reading SEC Approves Temporary NYSE Waiver of Stockholder Approval Rules to Facilitate Capital Raising in the Wake of COVID-19

On April 6, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued a new Compliance and Disclosure Interpretation (C&DI) concerning the application of the SEC’s conditional relief order (the Order) that was issued in the wake of the Coronavirus Disease 2019 (COVID-19) for companies filing their annual reports on Form 10-K.
Continue Reading SEC Division of Corporation Finance Issues C&DI about Conditional Relief Order and Incorporation by Reference Into Form 10-K

On March 31, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance (the Division) issued two new Compliance and Disclosure Interpretations (C&DIs) related to compliance with Rule 12b-25 in connection with the SEC’s conditional relief order (the Order) that was issued in the wake of the Coronavirus Disease 2019 (COVID-19).
Continue Reading SEC Division of Corporation Finance Issues New C&DIs about the SEC’s Conditional Relief Order and Compliance with Rule 12b-25