Tag: SEC Division of Corporation Finance

Corp Fin issues Disclosure Guidance: Topic No. 9 Coronavirus (COVID-19)

Today, the staff of Corp Fin issued Disclosure Guidance Topic No. 9, which offers the staff’s views regarding disclosure considerations, trading on material inside information and reporting financial results in the context of COVID-19 and related uncertainties. The guidance includes a valuable series of questions designed to help companies assess, and to stimulate effective disclosure regarding, the impact of the coronavirus.  As always these days, the guidance makes clear that it represents only the views of the staff, is not binding and has no legal force or effect.

SEC staff offers relief regarding manual signature retention requirements for electronic filings in light of COVID-19

The staff of various SEC divisions, including Corp Fin, has just issued a new Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns.  The statement offers some relief in connection with “the authentication document retention requirements under Rule 302(b) [of Reg S-T] in light of health, transportation, and other logistical issues raised by the spread of coronavirus disease 2019 (COVID-19).”

Guidance provides regulatory flexibility regarding annual meetings

Today, in light of the spread of COVID-19, the SEC announced new Corp Fin staff guidance regarding annual meetings.  Because of limitations on the ability to hold in-person annual meetings as a result of health and travel concerns, the staff guidance “provides regulatory flexibility to companies seeking to change the date and location of the meetings and use new technologies, such as ‘virtual’ shareholder meetings that avoid the need for in-person shareholder attendance, while at the same time ensuring that shareholders and other market participants are informed of any changes.” 

Corp Fin operating status

Corp Fin has issued an announcement regarding Corp Fin’s operating status, in light of the impact of the coronavirus. Not to worry—Corp Fin is still open and operating, but many Corp Fin staff members are “teleworking.” (Apparently, according to the WSJ,  an employee at the SEC was “referred for novel coronavirus testing.”) Nonetheless, Corp Fin continues “to conduct normal business functions,” including reviewing filings and accelerating registration statements under normal time frames—at least that’s the plan.

New disclosure guidance on confidential treatment and disclosure of international IP risks

Corp Fin has posted two new CF Disclosure Guidance Topics. Topic No. 7,  Confidential Treatment Applications Submitted Pursuant to Rules 406 and 24b-2, supersedes SLBs 1 and 1A and relates to the process for submission of requests for confidential treatment, not under the new streamlined approach adopted earlier this year (although the Topic does take up the new process for extensions), but rather under the old alternative approach that still lives but is now rarely used. Topic No. 8, which relates to Intellectual Property and Technology Risks Associated with International Business Operations, provides helpful guidance regarding disclosures that Corp Fin believes companies should consider with respect to intellectual property and technology risks that could arise in connection with international operations, especially in locations where protection of intellectual property may be a bit dicey.  The new topics make clear that they are just that—staff guidance—and have no legal force or effect nor do they alter or amend applicable law or create new or additional obligations. Nevertheless, the new guidance, especially Topic No. 8 regarding IP risk disclosure, provides useful checklists of issues to consider and is definitely worth a look.

Happy holidays everyone!

Corp Fin posts chart of 2019-2020 Shareholder Proposal No-Action Responses

You may recall that, last month, Corp Fin announced that it had revisited its approach to responding to no-action requests to exclude shareholder proposals.  In essence, under the new policy, the staff may respond to some requests orally, instead of in writing, and, in some cases, may decline to state a view altogether, leaving the company to make its own determination. (See this PubCo post.)  In describing the new approach in remarks to the PLI Securities Regulation Institute, Corp Fin Deputy Director Shelley Parratt said that the plan was to post a chart on the SEC website with the bottom line responses to these no-action requests and to inform both the company and the proponent by email that the response would shortly be posted on the chart. (See this PubCo post.) As reported on thecorporatecounsel.net blog, the 2019-2020 Shareholder Proposal No-Action Responses chart is now available. Parratt had suggested that the chart might actually be easier for readers to follow—and she may well be right.

Corp Fin revamp

Corp Fin has announced a “realignment” of its disclosure program “to promote collaboration, transparency and efficiency,” effective yesterday.  As part of the new realignment, companies have been reassigned to one of seven new industry-focused offices.