Governance & Compliance Insider

Early Compliance with MD&A Amendments Possible for Upcoming 10-Ks

Early Compliance with MD&A Amendments Possible for Upcoming 10-Ks

Last November, the SEC finalized certain amendments that would eliminate selected financial data, two years of supplementary financial information, and MD&A provisions for the contractual obligations table and off-balance sheet disclosure, under certain circumstances, for SEC reports and registration statements. Companies may now early adopt these amendments for filings made after the rulemaking’s effective date of February 9, 2021, as long as they provide disclosure...

SEC Staff Releases FAQs on Regulation S-K Amendments

SEC Staff Releases FAQs on Regulation S-K Amendments

In response to commonly asked questions, the SEC staff has released three FAQs related to amendments to the business description, legal proceedings and risk factor disclosure requirements in Regulation S-K Items 101, 103, and 105, discussed here.  The rulemaking became effective on November 9, 2020. Compliance for Form S-3 Registration Statements and Prospectus Supplements The first FAQ clarifies that for registration statements on Form S-3...

Proposed SEC Exemption for Certain Finders

Proposed SEC Exemption for Certain Finders

On October 7, 2020, the Securities and Exchange Commission (”SEC”) proposed a new limited, conditional exemption from broker-dealer registration requirements of Section 15(a) of the Securities and Exchange Act of 1934, as amended (“Exchange Act”) for “finders” who assist issuers with raising capital in private markets from accredited investors. The proposed exemption would permit natural persons to engage in certain defined and limited activities involving...

It’s Time to Talk Diversity in D and O Questionnaires (with Sample Question)

It’s Time to Talk Diversity in D and O Questionnaires (with Sample Question)

Corporate secretaries of public companies will soon be updating their D&O questionnaires for the 2021 proxy season, and they should consider whether to include a question that allows directors to self-identify as diverse.  While companies may be hesitant to raise the issue, increasingly, they are being asked for diversity data on their boards and employees.   In recent news: The California governor has signed into law...

SEC Updates Accredited Investor and Qualified Institutional Investor Definitions

SEC Updates Accredited Investor and Qualified Institutional Investor Definitions

On August 26, 2020, the Securities and Exchange Commission (the “Commission”) adopted amendments to update the definition of “accredited investor” in the Commission’s rules governing certain kinds of private securities offerings, including securities offerings to natural persons and entities conducted pursuant to Rules 506(b) and 506(c) of Regulation D under the United States Securities Act of 1933, as amended (the “Securities Act”), and the definition...

What Counts as a “Perk” During the COVID-19 Pandemic?

What Counts as a “Perk” During the COVID-19 Pandemic?

Companies have offered benefits to employees, including executive officers, to enable them to continue their work and otherwise to make their lives easier during the COVID-19 pandemic.  Now the SEC has released additional guidance as to when these benefits constitute perquisites or personal benefits that should be included in executive compensation for proxy disclosure purposes.  See Question 219.05 of the SEC’s Compliance and Disclosure Interpretations. ...

SEC Updates Guidance on Expiring Confidential Treatment Orders

SEC Updates Guidance on Expiring Confidential Treatment Orders

On September 9, the SEC’s Division of Corporation Finance updated its guidance to outline three alternatives for handling an expiring confidential treatment order (“CTO”): 1) If the contract continues to be material but the previously redacted information is no longer confidential: refile the unredacted exhibit. 2) If the contract continues to be material, and the previously redacted information continues to be confidential, request to extend...

SEC Updates Requirements for Business, Legal Proceedings and Risk Factor Disclosures

SEC Updates Requirements for Business, Legal Proceedings and Risk Factor Disclosures

The Securities and Exchange Commission (the “SEC”) has adopted amendments to Regulation S-K to update the description of business (Item 101), legal proceedings (Item 103), and risk factors (Item 105) that public companies are required to provide in certain registration statements and reports. These disclosure requirements have not undergone significant revisions in over 30 years. In related remarks, SEC Chair Jay Clayton emphasized the modernizing...