On August 20, the staff of the Division of Corporation Finance (the staff) of the Securities and Exchange Commission released several new Compliance and Disclosure Interpretations (C&DIs) relating to interactive data/eXtensible Business Reporting Language (XBRL), with a focus on items relating to Inline XBRL format requirements.
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Investment Advisers

On August 21, by a vote of 3 to 2, the Securities and Exchange Commission issued interpretive guidance on an investment adviser’s fiduciary duties with respect to voting of proxies for client accounts. The guidance makes clear that advisers may agree with their clients that the client, and not the adviser, will vote proxies, but such guidance is generally impractical for advisers to private funds and registered investment companies (because there is no practical way to assign voting power to the funds).
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On August 20, the Securities and Exchange Commission announced it had charged Florida-based TherapeuticsMD Inc. with Regulation FD violations stemming from alleged sharing of material non-public information with research analysts without also publicly disclosing the information, in what appears to be the first such Regulation FD enforcement case brought by the SEC in the last six years.
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On August 8, the Securities and Exchange Commission proposed amendments to modernize the required disclosures under Regulation S-K regarding a company’s business description, legal proceedings and risk factors (the Proposal). The Proposal is part of the Staff’s disclosure effectiveness initiative to improve its disclosure regime for investors and registrants. The Proposal would implement a more principles-based approach with respect to the disclosure rules relating to the registrant’s business description and risk factors. The SEC notes that its aim for using such an approach, as opposed to prescriptive requirements, would be to “elicit more relevant disclosures” about the items because the current requirements “may not reflect what is material to every business.” The following are key elements of the proposed amendments.
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The Securities and Exchange Commission recently adopted final rules to modernize and simplify the disclosure requirements for public companies under Regulation S-K. This rulemaking was mandated by the Fixing America’s Surface Transportation Act (FAST Act), and the final rules are substantially in the forms originally proposed by the SEC in October 2017 (as discussed in the October 20, 2017 edition of the Corporate and Financial Weekly Digest).

The final rules make several significant changes to Regulation S-K and related rules and forms. The following are some highlights:
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On February 6, the staff of the Division of Corporation Finance of the Securities and Exchange Commission released two identical Compliance and Disclosure Interpretations (C&DIs). These C&DIs provide guidance on disclosure required under Items 401 and 407 of Regulation S-K in circumstances where a director or board nominee self-identifies specific diversity characteristics, such as race,

The Securities and Exchange Commission recently announced that it had at last adopted final rules to implement Section 14(j) (Disclosure of Hedging by Employees and Directors) of the Securities Exchange Act of 1934, which was enacted in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act. New Item 407(i) of Regulation S-K will require a company to describe any practices or policies it has adopted regarding the ability of employees (including officers) or directors, or their designees, to purchase financial instruments, or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity securities of the company held directly or indirectly by employees or directors, including company equity securities granted as compensation. This disclosure will be required in proxy or information statements relating to the election of directors. The final rules specify that the disclosure requirement will apply to equity securities of the company, its parents, its subsidiaries and subsidiaries of the company’s parents, but do not define the term “designee” (instead requiring a facts and circumstances analysis).
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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.

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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.
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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