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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.
Continue Reading SEC Approves Amendments to NYSE Shareholder Approval Rules for Certain Equity Issuances and Requirements for Related Party Transactions

On November 12, Institutional Shareholder Services (ISS) issued updates to its 2021 US benchmark proxy voting policies. ISS will apply the updated policies to shareholder meetings occurring on or after February 1, 2021.

Proxy advisory firms, such as ISS, review proposals to be voted on at public company shareholder meetings and make voting recommendations to their clients based on the firm’s voting policies and standards.
Continue Reading ISS Issues Its 2021 Proxy Season Updates

On May 14, the Securities and Exchange Commission announced the adoption and immediate effectiveness of Section 312.03T of the NYSE Listed Company Manual. Recognizing that existing exceptions to the shareholder approval requirements in the NYSE Listed Company Manual are “not helpful in most situations arising from the COVID-19 pandemic,” Section 312.03T provides a temporary exception to shareholder approval requirements applicable to certain issuances of equity securities (or convertible or other securities that may result in the issuance of equity securities) representing 20 percent or more of a New York Stock Exchange (NYSE)-listed company’s common stock or voting power, as well as narrow exceptions from shareholder approval requirements in connection with issuances to a related party or equity compensation. Section 312.03T is scheduled to expire on June 30, 2020.
Continue Reading NYSE Provides Temporary Relief From Shareholder Approval Requirements Due to COVID-19

On April 6, the Securities and Exchange Commission issued a release (the Release) announcing that the New York Stock Exchange (NYSE) had issued temporary and partial waivers from the requirement that NYSE-listed companies obtain stockholder approval in connection with certain related party and 20 percent equity issuances (the Waiver). In the Release, the NYSE acknowledged the “unprecedented disruption” caused by the COVID-19 pandemic and the great likelihood that many listed companies will “have urgent liquidity needs in the coming months due to lost revenues and maturing debt obligations,” which may mean that listed companies will “need to access additional capital that may not be available in the public equity or credit markets.” The Waiver provides NYSE-listed issuers with greater flexibility to engage in capital raising transactions, such as private investment in public equity (PIPE) transactions and registered direct offerings, that may otherwise be constrained by the NYSE’s existing stockholder approval rules. The Waiver remains in effect through June 30, 2020.
Continue Reading SEC Approves Temporary NYSE Waiver of Stockholder Approval Rules to Facilitate Capital Raising in the Wake of COVID-19

In a recently issued letter decision, the Delaware Court of Chancery reiterated the general rule that directors have an unencumbered right to access corporate information (with certain exceptions). The case involves a dispute between two groups of directors—those affiliated with a controlling stockholder, and those that are not. An affiliated director filed a motion to compel the production of information, including corporate communications between (1) unaffiliated directors and officers of the corporation and company counsel; and (2) members of a special committee formed specifically to negotiate with the controlling stockholder and that committee’s own independent counsel. The court largely granted the affiliated director’s request, with the exception of communications between the special committee and its counsel.
Continue Reading Delaware Chancery Reiterates Directors’ Right to Access Corporation Information

On February 3, the European Securities and Markets Authority (ESMA) published a practical guide (Guide) to the national rules across the European Economic Area (EEA) on the implementation of the EU/EEA Transparency Directive’s requirements relating to major shareholding notifications (i.e., EEA long-position reporting requirements).
Continue Reading ESMA Publishes Practical Guidance on EEA Major Holdings Notification Obligations