Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: SEC

FINRA Releases a Regulatory Notice That the SEC Approved the CAT Fee Dispute Resolution Process

Posted in Broker-Dealer
On November 15, the Financial Industry Regulatory Authority issued a Regulatory Notice concerning the Securities and Exchange Commission’s approval of SEC Rule 6898 (Consolidated Audit Trail (CAT) Fee Dispute Resolution). The new rule establishes a procedure under which an industry member that disputes a CAT fee must file a written application with the CAT NMS,… Continue Reading

SEC Enforcement Division Issues Report on Priorities and Fiscal Year 2017 Results

Posted in Broker-Dealer
On November 15, the Enforcement Division of the Securities and Exchange Commission issued a report highlighting its 2018 enforcement priorities and its enforcement results for 2017. In the report, the Enforcement Division stated the five core principles that will guide enforcement in 2018: 1) focus on the Main Street investor; 2) focus on individual accountability;… Continue Reading

SEC Staff Publishes New Guidance on Shareholder Proposals

Posted in SEC/Corporate
On November 1, the Division of Corporation Finance of the Securities and Exchange Commission (Division) published Staff Legal Bulletin No. 14I (SLB 14I), which provides new, issuer-friendly guidance on shareholder proposals in advance of the 2018 proxy season. Specifically, SLB 14I provides guidance on (1) exclusion of shareholder proposals under the “ordinary business” and “economic… Continue Reading

SEC Approves a Longer Period to Review Fees for the Consolidated Audit Trail

Posted in Broker-Dealer
Earlier this year, several exchanges and the Financial Industry Regulatory Authority filed proposed rule changes to adopt industry member fees that would fund the consolidated audit trail (CAT). The proposed rule changes were immediately effective upon filing with the Securities and Exchange Commission. However, on June 30, the SEC temporarily suspended the rules and initiated… Continue Reading

FINRA Releases Notice to Members Addressing “Pay-to-Play” Rule for Capital Acquisition Brokers

Posted in Broker-Dealer
On November 6, the Financial Industry Regulatory Authority (FINRA) released Notice to Members 17-37, which provides information about the Pay-to-Play rule applicable to capital acquisition brokers (CABs). The SEC’s pay-to-play rules prohibit an investment adviser and its covered associates from providing or agreeing to provide payment to any person to solicit a government entity for… Continue Reading

SEC Division of Corporation Finance Issues C&DI Clarifying Exemptions for Non-GAAP Information in Forecasts for M&A Transactions

Posted in SEC/Corporate
On October 17, the staff of the Securities and Exchange Commission’s Division of Corporation Finance issued guidance related to the scope of Regulation G’s exemption for disclosure of non-generally accepted accounting principles (GAAP) information.… Continue Reading

SEC Approves PCAOB Rule to Require Enhanced Audit Reports

Posted in SEC/Corporate
On October 23, the Securities and Exchange Commission approved new audit reporting standard, AS 3101, proposed by the Public Company Accounting Oversight Board (PCAOB), which requires auditors to provide new information in public company audit reports, with the goal of making such reports more informative for investors and other financial statement users. The adoption of… Continue Reading

ISS Announces Results of Its 2017 Policy Application Survey

Posted in SEC/Corporate
On October 19, proxy advisory firm Institutional Shareholder Services (ISS) announced the results of its Policy Application Survey (PAS). The PAS, which ran from August 3 through October 6, reflects 328 responses: 77 from institutional investors and organizations representing them, and 251 from members of the corporate community, including companies, consultants/advisors to companies, corporate directors… Continue Reading

SEC-Proposed Amendments to Modernize, Simplify and Increase the Accessibility of Required Disclosure

Posted in SEC/Corporate
As previously reported in the October 13, 2017 edition of Corporate & Financial Weekly Digest, on October 11, the Securities and Exchange Commission proposed amendments (the Proposal) to modernize and simplify disclosure requirements in Regulation S-K, and related rules and forms. The Proposal is intended to reduce registrants’ burden and costs to comply with the… Continue Reading

SEC Announces Rule Proposal to Modernize, Simplify and Increase the Accessibility of Required Disclosure

Posted in SEC/Corporate
On October 11, the Securities and Exchange Commission issued a press release announcing that it voted to propose amendments to modernize and simplify disclosure requirements in Regulation S-K, and related rules and forms, by updating, streamlining or otherwise improving the SEC’s disclosure framework “in a manner that reduces the costs and burdens on registrants while… Continue Reading

SEC Approves FINRA Registration, Qualification and Continuing Education Rules

Posted in Broker-Dealer
The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority rules that (1) consolidate the National Association of Securities Dealers (NASD) and Incorporated New York Stock Exchange registration rules, as well as existing FINRA rules; (2) restructure the representative-level qualification examination requirements; and (3) amend continuing education requirements. The rules will become effective… Continue Reading

SEC Provides Regulatory Relief to Companies Impacted by Recent Hurricanes

Posted in SEC/Corporate
On September 28, the Securities and Exchange Commission (SEC) announced its issuance of an order and its adoption of interim final temporary rules to provide regulatory relief to companies, including publicly traded companies, investment companies, accountants and transfer agents, affected by Hurricanes Harvey, Irma and Maria. The order and interim rules conditionally exempt affected persons… Continue Reading

SEC Approves FINRA Rule Change to Subject Capital Acquisition Brokers to Pay-to-Play Rules

Posted in Broker-Dealer
On September 29, the Securities and Exchange Commission approved the rule proposal of the Financial Industry Regulatory Authority to subject capital acquisition brokers (CABs) to the same pay-to-play restrictions already applicable to non-CAB member firms. As explained in more detail in this Katten advisory, CABs are FINRA members that are engaged in a limited range… Continue Reading

SEC and Division of Corporation Finance Issue New Pay Ratio Disclosure Guidance

Posted in SEC/Corporate
On September 21, the Securities and Exchange Commission (SEC) issued an interpretive release (available here) regarding compliance with Item 402(u) of Regulation S-K (the Pay Ratio Disclosure Rule), which sets forth the requirement that each registrant disclose the ratio of the compensation of its principal executive officer (PEO) to its median employee’s compensation. In the… Continue Reading

Implementation of Pay Ratio Disclosure Requirement Not Expected to Be Delayed

Posted in SEC/Corporate
On September 15, at the ABA Business Law Section Annual Meeting, the Securities and Exchange Commission (SEC) Division of Corporation Finance (Division) Director Bill Hinman provided remarks on various matters, including the Division’s focus on capital formation-related matters. Of particular note, Director Hinman indicated that he expects that Item 402 of Regulation S-K (the Pay… Continue Reading

SEC Division of Corporation Finance Issues New C&DIs on “Regulation A+”

Posted in SEC/Corporate
The Securities and Exchange Commission’s (SEC) Division of Corporation Finance (Division) recently issued three new Compliance and Disclosure Interpretations (C&DIs) related to so-called “Regulation A+.” The new C&DIs address the following issues (among others): C&DI 182.21 provides that a Regulation A issuer that registers a class of its securities pursuant to the Securities Exchange Act… Continue Reading

FINRA Delays Rule 4210 Margining of Covered Agency Transactions to June 2018

Posted in Broker-Dealer
On September 19, the Financial Industry Regulatory Authority (FINRA) took action to delay until June 25, 2018, the implementation of margin requirements for Covered Agency Transactions under FINRA Rule 4210. As defined in the amendments to FINRA Rule 4210, adopted in 2016, Covered Agency Transactions include (1) To Be Announced (TBA) transactions, inclusive of adjustable… Continue Reading

SEC Commissioners Announce Search for First-Ever Advocate for Small Business Capital Formation

Posted in SEC/Corporate
On September 13, the Commissioners of the Securities and Exchange Commission (SEC) announced the launch of a nationwide search for candidates to fill the new senior executive position of Advocate for Small Business Capital Formation. The position will be responsible for establishing and overseeing a new SEC office—the Office of the Advocate for Small Business… Continue Reading

SEC Issues Statement on September 5 Implementation of “T+2” Settlement Cycle for Securities Transactions

Posted in SEC/Corporate
As previously discussed in the March 24 edition of the Corporate & Financial Weekly Digest, the Securities and Exchange Commission (SEC), on March 22, adopted an amendment to Rule 15c6-1(a) that has shortened the standard settlement cycle for most broker-dealer securities transactions from three days (known as T+3) to two days (known as T+2), effective… Continue Reading

NYSE Issues Proposed Amendment to Limit Issuance of Material News After Market Close

Posted in SEC/Corporate
On August 18, the New York Stock Exchange (NYSE) issued a proposed amendment to Section 202.06 of the NYSE Listed Company Manual, which would prohibit the issuance of material news by a listed company between the official closing time of the NYSE’s trading session until the earlier of the publication of such company’s official closing… Continue Reading

2017 Amendments to the Delaware General Corporation Law

Posted in SEC/Corporate
In its most recently completed session, the Delaware state legislature adopted amendments to various provisions of the Delaware General Corporation Law (DGCL). These amendments became effective August 1. While many of the amendments were technical in nature (e.g., amendments to the merger provisions of DGCL §§ 252, 253, 258 and 267 to consistently use the… Continue Reading

Second Circuit Issues Key Ruling Regarding Personal Benefit Requirement for Insider Trading Liability

Posted in SEC/Corporate
In United States vs. Martoma, issued on August 23, the Second Circuit reexamined its standard for evaluating liability for insider trading under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. In particular, the Second Circuit clarified the personal benefit requirement for a finding of tippee liability. A tippee violates Section… Continue Reading

SEC Division of Corporation Finance Issues New and Updated C&DIs on Omission of Financial Information from Draft Registration Statements

Posted in SEC/Corporate
Since the adoption of the Fixing America’s Surface Transportation Act (FAST Act) on December 4, 2015, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission has issued six Compliance and Disclosure Interpretations (C&DIs) relating to the FAST Act, the first two of which were summarized in the Corporate and Financial Weekly… Continue Reading