On February 19, the Securities and Exchange Commission proposed Rule 163B under the Securities Act of 1933, which would permit any issuer, and any underwriter or other person acting on an issuer’s behalf, to communicate with qualified institutional buyers (QIBs) and institutional accredited investors (IAIs) regarding a potential public offering prior to or following the filing of a registration statement for the offering. These so-called “test-the-waters” communications are intended to help issuers gauge interest in possible public offerings before issuers incur the costs of filing a registration statement with the SEC.

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On December 8, the staff (Staff) of the Securities and Exchange Commission’s Division of Corporation Finance issued 35 new Compliance and Disclosure Interpretations (C&DIs) with respect to foreign private issuers, qualified institutional buyers and offshore offerings.
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On September 27, the staff (Staff) of the Securities and Exchange Commission’s Division of Corporation Finance issued three no-action letters relating to proxy access proposals. In two of the no-action letters, the Staff stated that it would not recommend enforcement action if the company seeking no action relief omitted proposals to adopt proxy access bylaws in reliance upon Rule 14a-8(i)(10) under the Securities Exchange Act of 1934, where the company adopted “standard” proxy access bylaws. In the third no-action letter, however, the Staff was unable to concur with a company’s view that a proposal to amend existing proxy access bylaw provisions could be excluded from the company’s proxy statement in reliance upon Rule 14a-8(i)(10). 
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As noted in the May 13 edition of Corporate and Financial Weekly Digest, SEC Chair Mary Joe White, Deputy Chief Accountant Wesley R. Bricker and other high-ranking members of the staff of the SEC have expressed concerns regarding non-GAAP disclosure practices. Correspondingly, on May 17, the Securities and Exchange Commission’s Division of Corporation Finance issued 12 new and revised Compliance and Disclosure Interpretations (C&DIs) relating to the use of non-GAAP financial measures.
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In a May 5 speech at the 2016 Baruch College Financial Reporting Conference, Wesley Bricker, deputy chief accountant at the Securities and Exchange Commission, discussed his observations regarding the use of non-generally accepted accounting principles (GAAP) financial measures, the transition to new standards for revenue recognition and leases, and the Financial Accounting Standards Board’s (FASB) financial instruments’ credit impairment proposal. Mr. Bricker’s sentiments regarding certain non-GAAP disclosure practices echo concerns expressed by others at the SEC, including Chair Mary Joe White, Chief Accountant Jim Schnurr and Director of the Division of Corporation Finance Keith Higgins.
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On October 30, the Securities and Exchange Commission proposed amendments to modernize: (1) Rule 147, promulgated under the Securities Act of 1933 (Securities Act) as a safe harbor exempting intrastate offerings from federal registration under the Securities Act, to further facilitate intrastate offerings and capital formation in light of recently-adopted crowdfunding provisions under state securities laws; and (2) Rule 504 of Regulation D under the Securities Act, which permits companies that are not SEC reporting companies to sell securities to an unlimited number of persons without regard to wealth or sophistication (and, if certain conditions are met, to engage in general solicitation and issue freely tradable securities), to increase the amount of securities that may be sold pursuant to the rule.
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On October 30, the Securities and Exchange Commission adopted “Regulation Crowdfunding,” which consists of final rules that will enable eligible companies to raise up to $1 million in capital in any 12-month period by offering securities through SEC registered intermediaries in crowdfunding transactions on the Internet. The long-awaited crowdfunding rules implement the exemption from registration under the Securities Act of 1933 (Securities Act) provided by Section 4(a)(6) of the Securities Act, which was adopted pursuant to the Jumpstart Our Business Startups (JOBS) Act. The exemption will be available to US issuers, other than reporting companies under the Securities Exchange Act of 1934 (Exchange Act), certain investment companies, blank check companies or companies that have indicated that their business plan is to engage in a merger or acquisition with an unidentified company, companies that have failed to comply with annual reporting requirements under Regulation Crowdfunding within two years prior to a proposed offering, and issuers that are disqualified under “bad actor” provisions.
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On October 29, the Division of Economic and Risk Analysis (DERA) of the Securities and Exchange Commission published the results of a study that analyzed the market for unregistered securities offerings during the period from 2009–2014. The study found that private placements outpaced the level of capital formation through registered securities offerings during recent years, totaling more than $2 trillion during 2014. Regulation D offerings accounted for approximately $1.3 trillion of the capital raised, of which approximately 99 percent was sold in reliance upon Rule 506. The study also found that Rule 506(c) offerings (i.e., private placements that are offered by means of general solicitation and advertising) represented only approximately 2 percent, or $33 billion, of the capital raised in Regulation D offerings. According to the study, the median size for Regulation D offerings conducted by non-financial issuers (i.e., issuers other than pooled investment funds and issuers that are not, according to their Form Ds, in the commercial banking, insurance, investing, investment banking, or other banking or financial services industry) was less than $2 million, suggesting that Regulation D remains a critical tool for small businesses to raise capital.
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