Tag: SEC Division of Corporation Finance
Corp Fin refuses to allow exclusion of new form of proxy access fix-it proposal
It ain’t over till it’s over, as they say. You may have thought that, after the series of staff no-action positions allowing exclusion of so-called “fix-it” proposals during the last proxy season, we had seen the last of them. If so, you would be forgetting how persistent (or relentless, depending on your point of view) these proponents are. And this time, the staff has rejected the no-action request of H&R Block—once again the unfortunate trailblazer— which had sought exclusion of another proxy access fix-it proposal—this time to eliminate the cap on shareholder aggregation to achieve the 3% eligibility threshold—from the prolific John Chevedden et al. Given the result, you can expect to see more of this form of fix-it proposal next proxy season.
Conflict minerals benchmarking study analyzes filings for 2016—was there any progress?
Development International has posted its most recent Conflict Minerals Benchmarking Study, analyzing the results of filings for the 2016 filing period. The study looked at filings submitted by the 1,153 issuers that had filed conflict minerals disclosures as of July 10, 2017. The number of issuers filing disclosures for 2016 reflected a decline of 5.6% compared to 2015. Most interesting, however, is that, notwithstanding statements from Corp Fin, echoed by the Acting SEC Chair at the time, advising companies that they would not face enforcement if they filed only a Form SD and did not include a conflict minerals report, the vast majority of companies continued to file conflict minerals reports.
Will pay-ratio disclosure benefit investors?
One of the arguments that has often been used to oppose the Dodd-Frank pay-ratio provision is that the rule does not really provide information that benefits investors; instead, the argument goes, the real animus for the rule is a political effort to focus attention on inequality. Now, an analysis of governance ratings from Bank of America Merrill Lynch, reported in the WSJ, suggests that pay-ratio information just could provide some warning signs that investors may find valuable.
Corp Fin posts FAQs regarding extension of process for confidential submission of draft registration statements
On June 29, Corp Fin announced that it was extending the process for confidential submission of draft registration statements, currently available only for IPOs of emerging growth companies, to IPOs of companies that are not EGCs, as well as for most follow-on offerings made in the first year after going public. The extension of this confidential process will allow more companies to defer the public disclosure of sensitive or competitive information until they are almost ready to market the offering—and potentially to avoid the public disclosure altogether if they ultimately decide not to proceed with the offering. The new process will become available on July 10, 2017. (See this PubCo post.) Subsequently, Corp Fin issued a series of FAQs to provide additional guidance.
You no longer have to be an EGC to…
…submit a confidential draft registration statement for IPOs, as well as for most offerings made in the first year after going public, Corp Fin announced yesterday. Until now, that beneficial process, first permitted by the JOBS Act, has been available only to emerging growth companies. The extension of this confidential process will allow more companies to defer the public disclosure of sensitive or competitive information until they are almost ready to market the offering—and potentially to avoid the public disclosure altogether if they ultimately decide not to proceed with the offering. According to the press release, the change “will provide companies with more flexibility to plan their offering. The nonpublic review process after the IPO reduces the potential for lengthy exposure to market fluctuations that can adversely affect the offering process and harm existing public shareholders. By requiring a public filing period prior to the launch of marketing, the process incorporates a feature of the EGC review process that provides an opportunity for the public to evaluate those offerings.” The new process will become available on July 10, 2017.
Does it pay to challenge the SEC over non-GAAP financial measures?
by Cydney Posner As discussed in this article, the WSJ engaged Audit Analytics to perform an analysis of SEC comment letters and company responses regarding the use of non-GAAP financial measures. What did they find? Companies are winning the argument more often than you might think.
Letter from six senators challenges authority of Acting SEC Chair on conflict minerals no-action position
by Cydney Posner It’s not only the NGOs that have expressed their dismay at the no-action position taken by Corp Fin and Acting SEC Chair Michael Piwowar with regard to compliance by companies with the conflict minerals rule. In this April 26 letter, six U.S. Senators express their doubt about […]
GAO issues annual report showing only slight progress in disclosures on conflict minerals
by Cydney Posner The GAO has recently issued its third annual report on conflict minerals. The GAO is required by Dodd-Frank to report annually on the effectiveness of the SEC’s conflict minerals rule in promoting peace and security in the DRC and adjoining countries (the “covered countries”) as well as […]
Senate hearing on conflict minerals law reveals common theme
by Cydney Posner On April 5, just prior to the release of Corp Fin’s Updated Statement on conflict minerals, the Senate Subcommittee on Africa and Global Health Policy held a hearing on the effects on the Democratic Republic of the Congo of Section 1502 of Dodd-Frank and the SEC’s related conflict […]
Responses to Corp Fin’s Updated Statement on Conflict Minerals
by Cydney Posner A number of NGOs have issued statements emphatically rejecting Corp Fin’s Updated Statement on the Effect of the Court of Appeals Decision on the Conflict Minerals Rule and the Acting Chair’s separate Statement on conflict minerals (see this PubCo post) and calling for companies to disregard them and […]
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