On December 18, the Securities and Exchange Commission voted to propose amendments (the Proposal) to the definition of “accredited investor” for purposes of private placements under Regulation D and the definition of “qualified institutional buyer” in Rule 144A under the Securities Act of 1933. The Proposal is intended to update and improve the definitions of those terms in order to more effectively identify both institutional and individual investors with the sophistication to participate in private capital markets transactions. In the SEC’s press release announcing the Proposal, SEC Chairman Jay Clayton noted that, “The current test for individual accredited investor status takes a binary approach to who does and does not qualify based only [on] a person’s income or net worth. Modernization of this approach is long overdue.” As highlighted in the fact sheet included in the press release, the Proposal would, among other things:
Continue Reading SEC Announces Proposed Amendments to the Definitions of “Accredited Investor” and “Qualified Institutional Buyer”

On September 6, the staff of the Division of Corporation Finance (the Staff) of the Securities and Exchange Commission announced changes (the Announcement) concerning its procedures for administering Rule 14a-8 under the Securities Exchange Act of 1934.
Continue Reading SEC Staff Announces Changes to Rule 14a-8 No-Action Request Process

On September 30, California Governor Jerry Brown signed into law California Senate Bill 826 (SB 826), which requires a publicly held corporation with shares listed on “a major United States stock exchange” and whose principal executive offices are located in California (as reported on the corporation’s annual report on Form 10-K) (Covered Corporations) to have at least one female director serving on its board of directors by December 31, 2019. By December 31, 2021, a Covered Corporation must have at least (a) three female directors if its board consists of six or more members, (b) two female directors if its board consists of five members or (c) one female director if its board consists of four or fewer members. Under SB 826, a female is defined as any individual who self-identifies as a woman, regardless of such individual’s designated sex at birth.

Continue Reading California Adopts Law Regarding Female Representation on Boards of Directors of Publicly Held Companies

On August 17, the Securities and Exchange Commission announced the adoption of proposed rule amendments (Amendments) to update and simplify certain disclosure requirements that “have become redundant, duplicative, overlapping, outdated or superseded” in light of (1) US Generally Accepted Accounting Principles (GAAP); (2) International Financial Reporting Standards (IFRS); (3) other SEC disclosure requirements; or (4) changes in the information environment, noting that the Amendments are intended to reduce the compliance burden for registrants without “significantly altering the total mix of information available to investors.” The SEC first proposed (and requested comment on) the Amendments in July 2016, as previously reported in the July 22, 2016 edition of the Corporate & Financial Weekly Digest. The Amendments are part of the SEC’s ongoing efforts to review and improve disclosure requirements for the benefit of investors and issuers, as well as implement provisions of the Fixing America’s Surface Transportation (FAST) Act.
Continue Reading SEC Adopts Amendments To Simplify and Update Certain Disclosure Requirements

On August 17, President Donald Trump announced via Twitter that, after speaking with “some of the world’s top business leaders” concerning ideas to improve business in the US, he has asked the Securities and Exchange Commission to study the current requirement that publicly traded companies report financial results on a quarterly basis and explore the

On August 10, the staff of the Securities and Exchange Commission published A Small Entity Compliance Guide for Issuers (the Guide), which summarizes and explains rules adopted by the SEC with respect to the recently amended definition of “smaller reporting company” and the accommodations available to smaller reporting companies. The Guide is one of a

As previously reported in the Corporate & Financial Weekly Digest edition of June 1, 2018, on May 24, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act (the Act), Section 507 of which directs the Securities and Exchange Commission to adopt an amendment to Rule 701 under the Securities Act of 1933. Rule 701 generally provides an exemption from the registration requirement imposed by the Securities Act for issuances of securities by a company that is not subject to the reporting requirements of the Securities Exchange Act of 1934 to its employees, directors and consultants under compensatory benefit plans. Pursuant to Section (e) of Rule 701, if the aggregate sales price or amount of securities sold by an issuer to investors in reliance on Rule 701 during any 12-month period exceeds $5 million, the issuer is required to deliver to investors an additional disclosure, including specified financial statements and risk factors. On July 18, consistent with the mandate under the Act, the SEC issued a final rule amending Section (e) of Rule 701 to increase the threshold for providing enhanced disclosure from $5 million to $10 million (subject to inflation adjustment every five years).
Continue Reading SEC Approves Amendment to Rule 701 and Issues a Concept Release Regarding Form S-8 and Rule 701

On May 24, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act. While the Act primarily serves to relieve smaller financial institutions from the burden of complying with certain requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Act also directs the Securities and Exchange Commission to adopt amendments to Rule 701 under the Securities Act of 1933 (Securities Act) and so-called “Regulation A+,” as summarized below.  
Continue Reading Dodd-Frank Legislation Directs SEC to Amend Rule 701 and Regulation A+

On May 11, the staff of the Division of Corporation Finance of the Securities and Exchange Commission (the Staff) issued 45 Compliance and Disclosure Interpretations (C&DIs) that relate to the proxy rules and proxy statements, replacing the Staff’s prior interpretations that were published in the Proxy Rules and Schedule 14A Manual of Publicly Available Telephone Interpretations (the Manual) and the March 1999 Supplement to the Manual (the Supplement). Thirty-five of the C&DIs reiterate prior guidance from the Manual and the Supplement. This article highlights the six C&DIs that reflect substantive changes and the four C&DIs that reflect technical changes to the prior guidance in the Manual and the Supplement. The Staff also noted that it is in the process of updating other previously published interpretations relating to the proxy rules.
Continue Reading SEC Division of Corporation Finance Issues C&DIs on Proxy Rules and Proxy Statements, Overhauling Telephone Interpretations Manual

Institutional Shareholder Services Inc. (ISS) recently launched the ISS Help Center, its new online communications portal that will help facilitate inquiries of ISS from investors, companies (issuers) and company advisors, including law firms and proxy solicitors, as well as responses from ISS to such inquiries. The ISS Help Center will provide a framework to submit