Securities Act of 1933

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

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

On October 23, Chairman Jay Clayton of the Securities and Exchange Commission and Chairman Heath P. Tarbert of the Commodity Futures Trading Commission issued a joint letter creating a one-year pilot program to formalize the practices between the Chairmen relating to CFTC orders that implicate the “bad actor” disqualification provisions of Regulations A and D under the Securities Act of 1933 (the SEC Disqualification Rules). Under the SEC Disqualification Rules, individuals or firms are disqualified from relying on certain exemptions from registration for securities offerings if certain triggering events occur, such as certain securities law violations or final orders issued by the CFTC in connection with certain enforcement proceedings.
Continue Reading SEC and CFTC Chairman Issue Joint Letter Regarding CFTC Orders Implicating Regulations A and D

On September 9, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission amended CF Disclosure Guidance: Topic No. 7 providing guidance to address alternatives for handling expiring “traditional” confidential treatment requests. This guidance amends and supplements Topic No. 7 issued by the Division on December 19, 2019.

The Division notes in Topic 7 that a company that previously has obtained a confidential treatment order with respect to a particular contract have three choices of what to do when the order is about to expire.
Continue Reading SEC Division of Corporation Finance Issues Additional Guidance Related to Expiring Confidential Treatment Orders

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 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 2, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 20-22 (the Notice) announcing updates to its interpretations regarding (1) FINRA Rule 4210(e)(8), which specifies margin requirements for control and restricted securities, and (2) FINRA Rule 4210(f)(5), which specifies conditions for the consolidation of two or more accounts carried for the same customer.
Continue Reading FINRA Announces Updates to Interpretations of Margin Rule Regarding Control and Restricted Securities and Consolidation of Accounts