Tag: SEC Division of Corporation Finance
A “speed bump” for proxy advisory firms instead of company pre-review?
The FT is reporting that the SEC is abandoning a key component of its proposal to add new disclosure and engagement requirements for proxy advisory firms, such as ISS and Glass Lewis. (See this PubCo post.) According to the report, the SEC has “scrapped the portion of the proposal that would have forced proxy advisers—led by Institutional Shareholder Services and Glass Lewis—to submit their voting recommendations to companies for checking before distributing them to investors in advance of shareholder meetings.” The proposal had received substantial pushback, including from the Council of Institutional Investors and even the SEC’s own Investor Advisory Committee. However, the FT appears to point the finger, or attribute the victory, depending on your point of view, primarily to hedge fund activists “who court proxy advisers’ support when fighting for board seats.”
Corp Fin staff offers more relief for paper filings
Apparently, there are still a number of filings submitted on paper, and the filers are experiencing logistical difficulties submitting them. Once again, in light of health and safety concerns related to COVID-19, the Corp Fin staff is providing relief for specified paper forms submitted for the period from and including April 23, 2020 to June 30, 2020.
Corp Fin staff provides relief for Form 144 paper filings
The Corp Fin staff is once again addressing logistical difficulties that have cropped up in light of COVID-19—this time it’s the submission of Forms 144 in paper. In this statement, the staff is providing temporary relief with regard to paper Forms 144 submitted during the period from April 10 through June 30, 2020. In the statement, the staff advises that it will not recommend enforcement action if, in lieu of mailing or delivering paper Forms 144 under Rules 101(b)(4) or 101(c)(6) of Reg S-T, the filer (or submitter) attaches a complete Form 144 as a PDF attachment to an email sent to PaperForms144@SEC.gov.
Corp Fin staff updates guidance for “notice-only” delivery of proxy materials
The Corp Fin staff announced that it has updated its Guidance for Conducting Shareholder Meetings in Light of COVID-19 Concerns (see this PubCo post), originally published on March 13. The updated guidance clarifies that the prior guidance regarding changes to the date, time and place of annual meetings of shareholders also applies to special meetings. The update also provides some relief for companies that shift to the “notice-only” method of furnishing proxy materials as a result of COVID-19-related delays in printing and mailing of full sets of proxy materials.
Corp Fin staff extends conditional relief to incorporation of Part III information
Today, the Corp Fin staff provided some additional relief in the context of incorporation of Part III information (very generally, information about directors and executive officers) into Forms 10-K. As you know, a company is allowed to incorporate into its Form 10-K Part III information from its definitive proxy (or information) statement if filed not later than 120 days after the end of the related ?scal year. If the definitive proxy statement is not timely filed, the company must file an amendment to its Form 10-K by the 120-day deadline to provide the omitted Part III information. New Form 10-K CDI 104.18 will allow a company to rely on the conditional relief provided by COVID-19 Order (Release No. 34-88465 (March 25, 2020) for the filing of the Part III information as long as the 120-day deadline falls within the relief period specified in the Order (March 1 and July 1, 2020) and the company meets the conditions of the Order (see this PubCo post).
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!
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