In December 2020, President Donald Trump signed into law the Holding Foreign Companies Accountable Act (the HFCAA). The HFCAA requires auditors of foreign companies that are publicly traded in the US to allow the Public Company Accounting Oversight Board (PCAOB) to inspect the auditors’ audit work papers for audits of non-US operations. If a company’s auditors fail to comply with the inspection requirement for three consecutive years, trading in such foreign company’s securities would be prohibited in US markets. The HFCAA also amends the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), mandates that the Securities and Exchange Commission identify foreign issuers that use an audit firm that is located in a foreign jurisdiction in which the PCAOB is restricted from inspecting or investigating the audit firm, and imposes additional SEC disclosure requirements on such foreign issuers.
Continue Reading Holding Foreign Companies Accountable Act Signed Into Law by President Trump
Mark D. Wood
SEC Proposes Rule 144 Tacking Amendments
On December 22, 2020, the Securities and Exchange Commission voted to propose amendments to Rule 144 under the Securities Act of 1933 (the Securities Act) relating to tacking of holding periods for certain “market-adjustable securities.” …
Continue Reading SEC Proposes Rule 144 Tacking Amendments
SEC Again Approves NYSE’s Direct Listing Rules
On December 22, 2020, the Securities and Exchange Commission approved the New York Stock Exchange’s proposed new direct listing rules to allow companies engaging in a direct listing to raise capital directly through a primary sale of shares, in addition to, or instead of, only facilitating sales of shares by existing shareholders, as previously permitted. …
Continue Reading SEC Again Approves NYSE’s Direct Listing Rules
SEC Adopts Amendments to MD&A and Other Financial Disclosures
On November 19, the Securities and Exchange Commission announced that it adopted amendments (the Amendments) to certain financial disclosure requirements in Regulation S-K, including with respect to Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A). …
Continue Reading SEC Adopts Amendments to MD&A and Other Financial Disclosures
Glass Lewis Issues 2021 Proxy Season Updates
On November 23, Glass Lewis issued its Proxy Voting Policy Guidelines for 2021. Glass Lewis, like other proxy advisory firms, reviews proposals to be voted on at public company shareholder meetings and makes voting recommendations to its clients based on its voting policies and standards. …
Continue Reading Glass Lewis Issues 2021 Proxy Season Updates
SEC Staff Issues Statement Regarding Signature Requirements
On November 20, the Staff of the Division of Corporation Finance, the Division of Investment Management, and the Division of Trading and Markets (the Staff) of the Securities and Exchange Commission issued an updated statement on requirements for manual signatures related to SEC filings.…
Continue Reading SEC Staff Issues Statement Regarding Signature Requirements
Division of Corporation Finance Issues Disclosure Consideration for China-Based Issuers
On November 23, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission issued CF Disclosure Guidance: Topic No. 10 (the Guidance), providing the Division’s views regarding disclosure considerations for companies based in or with the majority of their operations in the People’s Republic of China (referred to as “China-based” companies).…
Continue Reading Division of Corporation Finance Issues Disclosure Consideration for China-Based Issuers
Nasdaq Seeks SEC Approval of Board Diversity Rule
On December 1, the Nasdaq Stock Market LLC (Nasdaq) filed a rule proposal (the Proposal) with the Securities and Exchange Commission that, if approved by the SEC, would require all Nasdaq-listed issuers to comply with listing rules concerning board diversity and related disclosure. …
Continue Reading Nasdaq Seeks SEC Approval of Board Diversity Rule
SEC Announces Proposed Amendments to Rule 701 and Form S-8
On November 24, the Securities and Exchange Commission voted to propose amendments (the Proposal) to (1) Rule 701 under the Securities Act of 1933, as amended (Securities Act), which exempts certain compensatory equity offerings by non-reporting issuers from registration under the Securities Act, and (2) Form S-8, which is a registration statement form available for compensatory securities offerings by reporting issuers. …
Continue Reading SEC Announces Proposed Amendments to Rule 701 and Form S-8
SEC Adopts Amendments Permitting Use of Electronic Signatures for EDGAR Filings
On November 17, the Securities and Exchange Commission adopted amendments to Regulation S-T to permit the use of electronic signatures in executing documents submitted electronically to the SEC through EDGAR.…
Continue Reading SEC Adopts Amendments Permitting Use of Electronic Signatures for EDGAR Filings