Today, the SEC adopted a number of inflation-related adjustments under the JOBS Act, including an adjustment to the revenue cap in the definition of “emerging growth company,” as well as adjustments to certain thresholds and limitations in the crowdfunding exemption under Reg Crowdfunding. Inflation has been very real in the last couple of years, so the adjustments are more substantial than for the prior period. The new inflation-adjusted amounts will become effective upon publication in the Federal Register.
Corp Fin recently revised some of the guidance in its Financial Reporting Manual related to adoption of new accounting standards. One revision relates to the adoption of a new accounting standard in the context of a significant acquisition, and the second relates to transition period accommodations for EGCs. This new guidance could take on particular significance in the context of the new revenue recognition standard.
The Treasury Department recently issued a new report, A Financial System That Creates Economic Opportunities—Capital Markets, that, in its recommendations, not surprisingly, echoed in many respects the House’s Financial CHOICE Act of 2017. Having passed the House, the CHOICE Act has since foundered in the Senate (see this PubCo post). The recommendations in the Treasury report addressed approaches to improving the attractiveness of primarily the public markets, focusing in particular on ways to increase the number of public companies by limiting the regulatory burden. According to this Bloomberg article, SEC Chair Jay Clayton “called the report ‘a valuable framework for discussion’ among market participants ‘that will most certainly benefit the American people….We appreciate Treasury’s willingness to seek the SEC’s input during the drafting process, and we look forward to working alongside other financial regulators and Congress as we pursue our three part mission to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.’”
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.
In his first public speech as SEC Chair, Jay Clayton outlined for the Economic Club of New York eight principles that he aims to guide his tenure as Chair. In discussing these principles and some ways in which he plans to put them into practice, Clayton seemed to stress the need to focus more intently on the various costs of regulatory compliance—in dollars, in time, in effort, in complexity and in economic impact. In particular, Clayton drew attention to a reduction in the number of public companies in recent years—a “roughly 50% decline in the total number of U.S.-listed public companies over the last two decades”—attributing the decline at least in part to the expansion of disclosure requirements, in some cases beyond materiality. To address this issue, he asserted, the SEC “should review its rules retrospectively” from the perspective of the cumulative effect of required disclosure, not just each incremental slice. Finally, he noted that the SEC “has several initiatives underway to improve the disclosure available to investors, “ including implementation of recommendations contained in the SEC staff’s Report on Modernization and Simplification of Regulation S-K (see this PubCo post). According to Clayton, the staff “is making good progress on preparing rulemaking proposals based on this report….”
by Cydney Posner A draft of the Financial CHOICE Act of 2017 (fka version 2.0), a bill to create hope and opportunity for investors, consumers, and entrepreneurs — a masterpiece of acronyming — has just been released (and weighs in at 593 pages). The bill, sponsored by Jeb Hensarling, Chair […]
by Cydney Posner The SEC has adopted a number of inflation-related adjustments under the JOBS Act, including an adjustment to the revenue cap in the definition of “emerging growth company,” as well as adjustments to the dollar amounts in Reg Crowdfunding. A number of technical amendments were also adopted to […]
House passes bill for five-year extension of JOBS Act exemption from auditor attestation requirement
by Cydney Posner On Monday, the House passed the Fostering Innovation Act of 2015, notwithstanding this letter to Paul Ryan and Nancy Pelosi from the SEC’s Investor Advocate urging a vote against it. The bill, which presumably now moves to the Senate for consideration, amends Section 404(b) of SOX (internal […]
by Cydney Posner The SEC has approved interim final rules implementing two provisions of the Fixing America’s Surface Transportation (FAST) Act. As you may recall, the FAST Act was signed into law in early December and contained several measures that modified the JOBS Act or otherwise related to capital raising for […]
by Cydney Posner On December 10, 2015, Corp Fin issued an announcement highlighting changes in the securities laws resulting from the FAST Act. As previously discussed in this PubCo post, this transportation bill contains several measures that modify the JOBS Act or otherwise relate to capital raising for emerging growth companies, disclosure modernization, the […]