Today, Corp Fin posted a statement regarding its return to normal operations. For the most part, “absent compelling circumstances,” Corp Fin expects to address filings, submissions and requests in the order submitted. The message is this: expect everything to take longer than usual as the staff plays catch-up.
Happy holidays and happy new year everyone!
Here’s the latest from the SEC:
In the event of a federal government shutdown, the SEC will follow the agency’s plan, which contemplates focusing on “market integrity and investor protection.” Starting Thursday, December 27, the SEC “will have only an extremely limited number of staff members available to respond to emergency situations involving market integrity and investor protection, including law enforcement. In addition, certain Commission systems, including EDGAR, will be operating. Additional information is available from the Division of Corporation Finance and the Division of Investment Management.” Corp Fin has provided some FAQs (summarized below) that may be helpful for those in the registration process or contemplating offerings.
On the heels of the release of SLB 14J, Corp Fin has posted a couple of new no-action letters that shed some more light on the “ordinary business” exclusion of Rule 14a-8(i)(7). As you may recall, in SLB 14J, the staff addressed the nature of the board analysis the staff would find most “helpful” in evaluating a no-action request to exclude a shareholder proposal under Rule 14a-8(i)(7), as well as “micromanagement” as a basis for exclusion under that same Rule. Most impressive is that, in the response letters, the staff actually includes a sentence or two that provides some insight into the staff’s reasoning. If you recall, a request for more clarity from the staff was one of the comments raised at the SEC’s proxy roundtable, and the staff appears to have heard. (See this PubCo post.) Both of the letters were submitted in connection with proposals to Walgreens Boots Alliance.
Corp Fin has posted some updates to its CDIs relating to the new rule amendments regarding smaller reporting companies. (See this Cooley Alert and the SEC’s Amendments to the Smaller Reporting Company Definition — Compliance Guide.) In connection with the new updates, Corp Fin has also withdrawn a number of CDIs (presumably, at least in part, because they were no longer appropriate in view of the changes to the rules). Below are summaries:
New SLB 14J on shareholder proposals revisits the economic relevance and ordinary business exclusions
Corp Fin has just released a new staff legal bulletin on shareholder proposals—we’re up to 14J—that once again examines the exclusions under Rules 14a-8(i)(5), the “economic relevance” exception, and 14a-8(i)(7), the “ordinary business” exception. Notably, these rules were also the subject of SLB 14I. More specifically, the new SLB provides guidance with regard to the following:
the nature of the board analysis the staff would find most “helpful” in evaluating a no-action request to exclude a shareholder proposal,
“micromanagement” as a basis for exclusion under Rule 14a-8(i)(7) and
the application of Rule 14a-8(i)(7) to exclude proposals related to senior executive and/or director compensation matters.
The staff of Corp Fin have posted a revised set of CDIs interpreting the cross-border exemptions. The new CDIs replace the 17-year old interpretations that were contained in Section II of the July 2001 Interim Supplement to the antediluvian Telephone Interpretations Manual. (You may even have a copy in a three-hole binder somewhere.) Some of the CDIs reflect only technical revisions, some are substantive and some are entirely new interps.