Mark D. Wood

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On September 21, the Division of Corporation Finance of the Securities and Exchange Commission issued a new Compliance and Disclosure Interpretation (C&DI) addressing, and limiting, the ability of shell companies, including special purpose acquisition companies (SPACs), to use Form S-3 during the 12 months following a business combination.…
Continue Reading SEC Issues C&DI on Use of Form S-3 by SPACs

On September 23, the Securities and Exchange Commission voted to adopt amendments to the rules governing the process for the submission of shareholder proposals to be included in a registrant’s proxy statement. Rule 14a-8 of the Securities Exchange Act of 1934 (Exchange Act) requires registrants holding a shareholder meeting that is subject to the Exchange Act proxy rules to include in their proxy statement proposals submitted by shareholders, so long as the applicable procedural and substantive requirements are met.…
Continue Reading SEC Adopts Amendments to Shareholder Proposal Rules

On September 21, the Division of Corporation Finance of the Securities and Exchange Commission issued a new Compliance and Disclosure Interpretation (C&DI) regarding the treatment of benefits provided to executive officers in light of the COVID-19 pandemic and whether such benefits constitute perquisites or personal benefits that must be disclosed in a registrant’s summary compensation table and included when determining the registrant’s three most highly compensated officers (other than the registrant’s principal executive officer and principal financial officer) for identifying the “named executive officers.”…
Continue Reading SEC Issues C&DI on COVID-19 Related Benefits

As discussed in the August 31, 2020 edition of the Corporate & Financial Weekly Digest, on August 26, the Securities and Exchange Commission (SEC) approved rules proposed by the New York Stock Exchange (NYSE) to allow companies engaging in a direct listing to raise capital directly through the sale of primary shares upon the direct listing, in addition to, or instead of, facilitating sales of shares solely by existing shareholders.…
Continue Reading SEC Stays Implementation of New NYSE Direct Listing Rules

On August 26, the Securities and Exchange Commission adopted amendments to the definitions of “accredited investor” in Rule 501(a) and “qualified institutional buyer” in Rule 144A under the Securities Act of 1933 (Securities Act). The amendments expand the definition of accredited investor, a principal test to determine eligibility for participation in private capital markets, even if they do not meet specified income and net worth tests. Amendments to the qualified institutional buyer definition similarly expand the list of eligible entities under that definition. The amendments were adopted generally as proposed with no significant changes. The proposed amendments were previously covered in the December 20, 2019 edition of the Corporate & Financial Weekly Digest.…
Continue Reading SEC Amends the Definitions of “Accredited Investor” and “Qualified Institutional Buyer”

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 August 26, the Securities and Exchange Commission approved rules proposed by the New York Stock Exchange (NYSE) to allow companies engaging in a direct listing to raise capital directly through the sale of primary shares upon the direct listing, in addition to, or instead of, facilitating sales of shares solely by existing shareholders.…
Continue Reading SEC Approves New NYSE Direct Listing Rules

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 June 23, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission issued CF Disclosure Guidance: Topic No. 9A (Topic 9A) providing additional disclosure considerations for public reporting companies regarding operations, liquidity and capital resources disclosures in light of business and market disruptions related to the COVID-19 pandemic. Topic 9A supplements CF Disclosure Guidance Topic No. 9 issued by the Division on March 25, 2020 and discussed in Katten’s advisory “COVID-19 Impact on Public Disclosure on SEC Reporting Companies.”…
Continue Reading SEC Division of Corporation Finance Issues Additional Disclosure Guidance Related to COVID-19 Pandemic