The Securities and Exchange Commission is seeking comments on a Financial Industry Regulatory Authority (FINRA) proposal to adopt a Supplemental Liquidity Schedule (SLS), and instructions thereto, pursuant to FINRA Rule 4524. FINRA Rule 4524 provides in part that each member, as FINRA shall designate, shall file as a supplement to FOCUS Reports such additional financial or operational schedules or reports as FINRA may deem necessary. The proposed SLS, which would be filed as a supplement to the FOCUS Report, would be required to be filed by (1) each carrying member with at least $25 million in free credit balances, as outlined under Securities Exchange Act of 1934 (SEA) Rule 15c3-3(a)(8); and (2) any member with at least $1 billion in aggregate outstanding repurchase agreements, securities loan contracts and bank loans, as reported on their most recent FOCUS Report.
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Securities Exchange Act of 1934
SEC Approves Amendments to NYSE Shareholder Approval Rules for Certain Equity Issuances and Requirements for Related Party Transactions
Earlier this month, the Securities and Exchange Commission approved amendments (the Amendments) to New York Stock Exchange (NYSE) rules that require listed companies to obtain shareholder approval of certain private placements and equity issuances to “related parties,” as well as requirements related to transactions between a listed company and certain related parties. In particular, the Amendments, which were initially proposed in December 2020 and subsequently modified, modified Sections 312.03, 312.04 and 314.00 of the NYSE Listed Company Manual. According to NYSE, the Amendments to Sections 312.03 and 312.04 are intended to more closely align shareholder approval requirements applicable to NYSE listed companies with comparable requirements for companies listed on Nasdaq or NYSE American and, in doing so, provide greater flexibility to NYSE-listed companies seeking to raise capital. The flexibility provided by such Amendments tracks, in various respects, the flexibility provided through temporary rules adopted by NYSE in response to the COVID-19 pandemic, which are being terminated by the Amendments. The amendments to Section 314.00 clarify the role of the audit committee in approving related party transactions, and expand the scope of transactions to which related party transaction rules apply.
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FINRA Files With the SEC to Extend Time to Announce the Implementation Schedule for FINRA’s Corporate Bond New Issue Reference Data Service
On April 12, the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change with the Securities and Exchange Commission pursuant to Section 19(b)(3) of the Securities Exchange Act of 1934 to extend its time to announce the implementation schedule for FINRA’s corporate bond new issue reference data service.
On January 15, the SEC approved…
SEC Corp Fin Staff Issues Statement on SPAC Transactions
On March 31, the staff of the Division of Corporation Finance (the Staff) of the Securities and Exchange Commission issued a staff statement (the Staff Statement) relating to accounting, financial reporting and governance issues for private companies to consider before engaging in a business combination with a special purpose acquisition company (SPAC).
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SEC Issues Notice of Substituted Compliance Application and Proposed Substituted Compliance Order for United Kingdom and Reopens Comment Period for Notice and Proposed Substituted Compliance Order for France
On April 5, the Securities and Exchange Commission voted to take two actions in the implementation of security-based swap regulation under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
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SEC Issued Order Permitting 30-Day Filing Extension for Broker-Dealers
In response to a recent request by the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission has issued an order (the Order) designed to ease potential burdens that smaller broker-dealers may face in obtaining audit services. Rule 17a-5(d)(1)(i) of the Securities Exchange Act of 1934 (Exchange Act) requires that, unless a broker meets…
New Rate for Fees Paid Under Section 31 of the Exchange Act
On February 16, the Financial Industry Regulatory Authority (FINRA) issued an Information Notice (Notice) regarding a new fee rate applicable to specified securities transactions on the exchanges and in the over-the-counter markets. Such fee rate will decrease from its current rate of $22.10 per million dollars in transactions to a new rate of $5.10 per million dollars in transactions.
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Holding Foreign Companies Accountable Act Signed Into Law by President Trump
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.
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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.” …
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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. …
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