Category: Securities
GAO report on gold supply chain reveals little progress in responsible sourcing
The GAO has issued a new report on conflict minerals focused in this instance on the supply chain for artisanal and small-scale mined (ASM) gold in the DRC region. The report also addressed efforts to encourage responsible sourcing of ASM gold and sexual violence in the region since the GAO’s last report in August 2016.
SEC sets (higher) fee rates for fiscal 2018, which begins October 1, 2017
On August 24, the SEC announced that it was, once again, hiking the fees it charges issuers to register their securities. In fiscal 2018, the fee rates for registration of securities and certain other transactions will be $124.50 per million dollars, up from $115.90 per million dollars last year.
EY study shows continued increase in voluntary audit committee disclosures among the Fortune 100
With the SEC now considering whether to approve AS 3101, the PCAOB’s new enhanced disclosure requirement for the auditor’s report (see this PubCo post), and SEC concept releases and other disclosure projects still hovering in the ether, there seems to be a steady march by companies toward inclusion of more supplemental audit committee disclosures on a voluntary basis, according to a new study by the EY Center for Board Matters. The study, which reviewed audit committee reporting in proxy statements by companies in the Fortune 100 for 2017, showed that companies in that elite group have demonstrated “[y]ear-over-year growth in voluntary audit-related disclosures in 2017 filings … similar to that seen in 2015 and 2016, indicating that companies and audit committees continue to reflect upon and make changes to the information that they communicate to shareholders.”
Deregulation? What deregulation? Two (persistent) campaigns for enhanced disclosure requirements
Notwithstanding the deregulatory emphasis of the current administration, two campaigns are currently being waged to convince the SEC to adopt new regulations mandating more disclosure—one related to human capital management and the other related to a frequent target, corporate political spending. Are these just pipe dreams? Is it time for a reality check? Or might there be some basis for believing that this SEC might act on these requests?
Corp Fin posts new and updated CDIs related to omission of financial information in registration statements
The Corp Fin staff has posted new and updated CDIs related to omission of financial information from registration statements by emerging growth companies and, under the recently expanded guidance that allows non-EGCs to file registration statements confidentially (see this PubCo post), by non-EGCs. The updated CDI under the FAST Act and the identical new CDI under the Securities Act appear to refine an earlier position taken by the staff.
Corp Fin supplements information regarding expanded process for confidential filing of IPO registration statements
Yesterday, the SEC supplemented the information in its June 29 announcement regarding its expanded draft registration statement processing procedures, which allowed companies that were not emerging growth companies to file confidentially. The supplement relates to availability of the process and transition matters. The announcement also indicates that companies may submit questions about their eligibility to use the expanded processing procedures to CFDraftPolicy@sec.gov.
SEC approves NYSE amendments requiring notice related to dividends and stock distributions, even if outside of NYSE trading hours (updated)
Yesterday, the SEC approved a rule change that amended the NYSE Manual to require listed companies to provide notice to the NYSE at least ten minutes before making any public announcement with respect to a dividend or stock distribution, irrespective of the time of day, even when the notice is outside of NYSE trading hours (rather than limited to the hours of 7:00 A.M. and 4:00 P.M. as in the prior rule). Bring your sleeping bags, NYSE staff: the NYSE indicated that “it intends to have its staff available at all times to review dividend or stock distribution notices immediately upon receipt, regardless of the time or date the notices are received….The Exchange staff will contact a listed company immediately if there is a problem with its notification.” Update: the NYSE has now proposed to amend the rule to delay its implementation to be “no later than February 1, 2018,” and will provide reasonable advance notice of the new implementation date by email to listed companies. (See this PubCo post.)
CII updates its best practices for proxy access
As proxy access bylaws have continued to proliferate—with 60% of the S&P 500 now having adopted some form of proxy access provisions—the Council of Institutional Investors has decided that the time is right to update its 2015 best practices guide. In particular, the 2017 update addresses practices that, while viewed by companies as designed to ensure the legitimate and appropriate use of proxy access, are viewed by CII as impairing the ability of shareholders to use proxy access. But will companies be guided by CII’s advice?
Decline in IPOs—blame Dodd-Frank?
A frequent lament these days is the decline in the number of IPOs and public companies generally, with much of the discussion—particularly at the agency and Congressional levels—focused on the adverse impact of increased regulatory burden. (See this PubCo post.) In December 2015, Congress directed the SEC’s Division of Economic and Risk Analysis to assess the impact of Dodd-Frank and other financial regulations on access to capital for consumers, investors and businesses and market liquidity, including U.S. Treasury and corporate debt markets. The staff of DERA has now issued its report to Congress on Access to Capital and Market Liquidity. The report begins with a gigantic caveat: it’s really challenging to determine the effects of changes in regulations. At the end of the day, DERA did not pinpoint any “causal relationship” between Dodd-Frank and developments in the capital markets, emphasizing instead that the volume of IPOs has historically ebbed and flowed, with many contributing factors influencing IPO dynamics.
Asset managers support shareholder proposals for board diversity—will it make a difference?
There’s been chatter about board gender diversity for a long time and, while there has been some modest progress, we have yet to see any dramatic breakthroughs. Now some of the largest asset managers are not just talking the talk, they are also walking the walk. Will it make a difference? Time will tell.
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