On October 21, the Securities and Exchange Commission announced that it will hold its annual Government-Business Forum on Small Business Capital Formation on November 19 at its Washington, DC headquarters. The forum will feature panel discussions on exempt and registered offerings occurring after the passage of the Jumpstart Our Business Startups Act (JOBS Act), and breakout sessions regarding the regulation of smaller reporting companies and exempt offerings. Interested individuals can attend in person or via webcast/teleconference. Katten partners Mark Wood and Jonathan Weiner will be participating in the SEC forum and, on November 18, will be panelists at the Growth Capital Summit in Washington, DC, which will include discussions of legislative, regulatory and enforcement developments affecting emerging growth capital markets.
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On October 6, the US House of Representatives passed the Disclosure Modification and Simplification Act of 2015 (H.R. 1525), which, if enacted, would require the Securities and Exchange Commission to (1) revise Regulation S-K (which governs disclosure requirements for registration statements and periodic reports, among other things) to eliminate duplicative, outdated or unnecessary disclosure requirements and to otherwise reduce the burdens imposed on emerging growth companies, accelerated filers, smaller reporting companies and other smaller issuers; (2) study additional ways of modernizing and simplifying disclosure requirements; and (3) permit registrants to submit a summary page on Form 10-K (with appropriate cross references to applicable material within the 10-K).
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On September 8, the SEC charged a sports supplements and nutrition company, its former audit committee chairman and three of its current and former executive officers with committing accounting, disclosure and other violations of federal securities laws. The charges arose primarily from the company’s failure to properly report as compensation perks provided to its executives.
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On June 16, the Securities and Exchange Commission denied a motion, filed by Monica J. Lindeen, Montana State Auditor, ex officio Commissioner of Securities and Insurance, which sought to stay the effectiveness of new “Regulation A+” (which became effective today, June 19). As noted in the June 5 edition of Corporate & Financial Weekly Digest, Ms. Lindeen, in her capacity as the Montana State Auditor and Commissioner of Securities and Insurance, previously filed a lawsuit with the Federal Court of Appeals for the District of Columbia (DC Circuit), which seeks to enjoin the effectiveness of Regulation A+ on the basis that Regulation A+ exceeded the SEC’s congressional mandate by pre-empting state “blue sky” review of Tier 2 offerings under Regulation A+. The lawsuit is currently pending.
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On May 27, the Federal Court of Appeals for the District of Columbia combined lawsuits filed by the commonwealth of Massachusetts and the state of Montana against the Securities and Exchange Commission. The lawsuits seek to enjoin the implementation of new Regulation A+ prior to its June 19 effective date. Both Montana and Massachusetts contend that Regulation A+ exceeded the SEC’s congressional mandate by pre-empting state “blue sky” review of Tier 2 offerings under Regulation A+.
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On March 25, the Securities and Exchange Commission adopted final rules that will expand the exemption from registration under the Securities Act of 1933 provided by Regulation A to include an exemption for up to $50 million of securities sold during a 12-month period in accordance with the new rules. This new exemption, which is often referred to as Regulation A+, implements Section 401 of The Jumpstart Our Business Startups Act (JOBS Act) (adding Section 3(b)(2) of the Securities Act), which required the SEC to adopt rules that would have the effect of updating and expanding Regulation A. The final rules address a number of comments received by the SEC in response to its December 2013 proposal, which was discussed in a prior edition of Corporate and Financial Weekly Digest.
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On December 18, 2014, the Securities and Exchange Commission proposed rule amendments that, if adopted, would modify SEC rules governing registration under Section 12(g) of the Securities Exchange Act of 1934 (Exchange Act), termination of registration under Section 12(g) of the Exchange Act and suspension of reporting obligations under Section 15(d) of the Exchange Act to reflect the thresholds enacted by Titles V and VI of the Jumpstart Our Business Startups Act (JOBS Act). Titles V and VI of the JOBS Act, which became effective upon adoption, raised the threshold for registration from 500 holders of record and total assets exceeding $1 million to either 2,000 holders or (except for banks and bank holding companies) 500 holders who are not accredited investors and total assets exceeding $10 million. The JOBS Act also raised the threshold at which a bank or bank holding company (but not other registrants) may terminate or suspend the registration of a class of its securities under the Exchange Act from 300 to 1,200 persons.
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Institutional Shareholder Services (ISS) and Glass Lewis, two leading proxy advisory firms, recently published their 2015 proxy voting guidelines for US companies, which include several updates applicable to the 2015 proxy season. 

Institutional Shareholder Services 

Two significant updates included in ISS’s 2015 proxy voting guidelines (the proposals of which were discussed previously in Corporate & Financial Weekly Digest) are as follows: 

Equity Plan Scorecard: ISS adopted a “scorecard” model for evaluating equity plan proposals whereby voting recommendations will largely be based on a combination of factors, both positive and negative, related to (1) plan cost, (2) plan features, and (3) grant practices. Under the new scorecard approach, for S&P 500 and Russell 3000 companies, cost will be weighted 45 percent, grant practices 35 percent and plan features 20 percent, with roughly a dozen individual factors within each of these three areas. The scorecard approach replaces the series of “pass/fail” tests (focused on cost and certain egregious practices) previously used by ISS to determine whether to recommend voting “against” an equity plan.
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On September 29, Institutional Shareholder Services (ISS), a leading proxy advisory firm, published the results of its 2014–2015 global voting policy survey. The survey, which, according to ISS, received more than 370 responses from a combination of institutional investors, corporate issuers and other corporate governance stakeholders, is an important component in ISS’ voting policy formulation process.
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The Council of Institutional Investors (CII), an advocacy group for corporate governance and shareholder rights, has published a report that highlights two approaches to disclosure regarding a board’s process of self-evaluation that CII’s members (employee benefit funds, endowments and foundations, among others) consider “best-in-class.” According to the report, CII’s members want to better understand the process by which a board seeks to assess and improve its performance. In-depth disclosure regarding the board evaluation process is not, however, a common practice in the United States, where proxy disclosure regarding the self-assessment process is typically limited to statements that such a process exists. Comparatively robust disclosure of the evaluation process is more common in non-US jurisdictions, including Canada, the United Kingdom, Europe and Australia, where companies often detail what the evaluation process entails. According to CII, its members “are eager for details about the board evaluation process at U.S. companies.”
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