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Agenda Announced for the July 19 SEC Advisory Committee Meeting

Posted in Accredited Investor Standard, Advisory Committee on Small and Emerging Companies, Regulation A+, SEC News

The agenda for the July 19 meeting of the SEC Advisory Committee on Small and Emerging Companies was recently announced.  During the meeting, the Committee will consider the “Accredited Investor” definition recommendation as discussed during the May 18 meeting.  There will also be an update and review of the first year of Regulation A+. The meeting will conclude with the SEC’s proposal to amend the “Smaller Reporting Company” definition.

The meeting will be live-streamed via the SEC website: https://www.sec.gov/info/smallbus/acsec.shtml

PLI Seminar: Private Placements and Hybrid Securities Offerings 2016

Posted in Crowdfunding, Events, General Solicitation, PIPEs, Regulation A+, Regulation D, Rule 144A

PLI’s Private Placements and Hybrid Securities Offerings 2016 conference on August 1-2, 2016, presents an expert faculty of leading practitioners and regulators as they discuss and analyze the changing regulatory framework and market for private offerings. The faculty will address the changes to private and exempt offerings brought about by the JOBS Act, including matchmaking platforms, “accredited investor” crowdfunding, offerings using general solicitation, Rule 144A offerings, and the practical implications of these changes for issuers, broker-dealers and investment advisers. In addition, they will address the basics of private placements, sales of restricted securities, Rule 144 and Section 4(a)(1-1/2) transactions and block trades. The panelists will discuss the considerations that have led many companies to remain private longer and defer IPOs, while creating liquidity opportunities for holders through private secondary trading markets. Panelists will address the basics of traditional private placements, PIPE transactions, and Rule 144A transactions, as well as recent developments affecting each of these capital raising alternatives.

Morrison & Foerster Partner Anna Pinedo will serve as chairperson for this event and will speak on the “Welcome and Introduction to Private Placements and Hybrid Financings” panel on Day One of the conference and on the “Welcome and Introduction to Conducting Hybrid Offerings” panel on Day Two. Morrison & Foerster Partner James Tanenbaum will speak on a panel entitled “Regulation A+” on Day One. The conference will be held at the PLI New York Center in New York, NY and is scheduled to begin at 9:00 a.m. EDT.

To register for this conference, or for more information, please click here.

Disclosure Effectiveness Initiative Continues to Move Forward

Posted in Disclosure Requirements, SEC News

Today, the Commission proposed for comment amendments that are intended to eliminate redundant, overlapping, outdated or superseded disclosure requirements.  The amendments, if adopted, would apply to SEC reporting companies, including foreign private issuers, as well as other entities regulated by the Commission, such as investment companies and broker-dealers.  The comment period will remain open for 60 days following publication of the proposing release in the Federal Register.

The press release is available here:  https://www.sec.gov/news/pressrelease/2016-141.html
The proposing release is available here:  https://www.sec.gov/rules/proposed/2016/33-10110.pdf

Investor Advocate Priorities

Posted in Disclosure Requirements, SEC News

Recently, the SEC’s Investor Advocate released a report regarding the Office’s areas of focus for fiscal year 2017.  The report notes that the Office of the Investor Advocate intends to monitor developments related to the SEC’s Disclosure Effectiveness Initiative, as well as scaled disclosure initiatives.  The report comments favorably on the SEC’s focus on the overuse of non-GAAP measures and notes that the Office will consider whether rulemaking is needed to provide additional clarification.  The report notes that the “trend toward scaling presents a significant risk to investors,” but does not provide an analysis regarding the types of disclosures that would be significant to investors and would be unavailable as a result of any scaled disclosure accommodations.  The full report is available here:  https://www.sec.gov/advocate/reportspubs/annual-reports/sec-office-investor-advocate-report-on-objectives-fy2017.pdf.

SEC Announces New Investor Advisory Committee Members

Posted in SEC News

The SEC announced the appointment of three new members to the Investor Advisory Committee (see: https://www.sec.gov/news/pressrelease/2016-137.html).  The Committee will hold its next meeting, which is open to the public, on July 14th.   The agenda for the upcoming meeting includes a discussion of sustainability reporting, which we have previously blogged about.

Complimentary Teleconference: All Things Canadian

Posted in Events, PIPEs, Private Placements

On July 27, 2016, at 1:00 p.m. EDT, Morrison & Foerster Partner Ze’-ev Eiger will be joined by Stikeman Elliott Partner Tim McCormick in hosting a complimentary teleconference entitled “All Things Canadian.” The speakers will discuss the rules of the road for securities offerings by non-Canadian issuers selling into Canada. The program will also cover the prospectus regime applicable to Canadian issuers, with a focus on the shelf registration process and on dual-listed issuers.

Topics will include:

  • Shareholder requirements for private placements, PIPEs and registered directs;
  • Completing a confidentially marketed offering;
  • Considerations for at-the-market offerings;
  • Timing of filing, approval and withdrawal requirements; and
  • Which JOBS Act accommodations are available to Canadian issuers?

CLE credit is pending for California and New York.

To register for this session, or for more information, please click here.

PLI Seminar: Understanding the Securities Laws 2016

Posted in Crowdfunding, Events, Private Placements, Regulation A+, Rule 144A

On July 21-22, 2016, Practising Law Institute will host its “Understanding the Securities Laws 2016” seminar. This program will provide an overview and discussion of the basic aspects of the U.S. federal securities laws by leading in-house and law firm practitioners as well as SEC staff. Emphasis will be placed on the interplay among the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, the Dodd-Frank Act, the JOBS Act, the securities related provisions of the FAST Act and related SEC regulations, and on how securities lawyers can solve practical problems that arise in the context of public and private offerings, SEC reporting, mergers and acquisitions and other common corporate transactions.

Morrison & Foerster Partner Anna T. Pinedo will lead a session entitled “Securities Act Exemptions” on Day One of the program. Topics will include:

  • Exempt securities versus exempt transactions;
  • Private placements;
  • Regulation D offerings;
  • Regulation A+ offerings;
  • Intrastate offerings;
  • Crowdfunding;
  • Employee equity awards;
  • Rule 144A high yield and other offerings;
  • Regulation S offerings to “non-U.S. persons”; and
  • Resales of restricted and controlled securities: Rule 144, Section 4(a)(7) and 4(a)(1½).

PLI will provide CLE credit.

For more information, or to register, please click here.

SEC to Address Board Diversity

Posted in Diversity, SEC News

In a recent speech, SEC Chair Mary Jo White addressed board diversity.  Chair White cited some important statistics in her remarks.  She noted that minority directors on boards of the top 200 companies on the S&P 500 have stagnated at 15% for the last several years, and the percentage of these companies with at least one minority director actually declined from 90% in 2005 to 86% in 2015.  Chair White also cited the GAO study (addressed in a prior post), which estimates that it would take more than 40 years for women’s representation on boards to be on par with men’s.  The SEC Staff is preparing a recommendation to the Commission to propose amending proxy statement disclosures to require that companies include more meaningful board diversity disclosures on board members and nominees.  See Chair White’s full remarks here:  https://www.sec.gov/news/speech/chair-white-icgn-speech.html.

SEC Issues C&DIs for Securities Act Rule 701

Posted in C&DI, Disclosure Requirements, SEC News

On June 23, 2016, the SEC Division of Corporation Finance (the “Division”) issued new Compliance and Disclosure Interpretations (“C&DIs”) for Securities Act Rule 701.  The new C&DIs address the exemption for offers and sales of securities pursuant to certain compensatory benefit plans and contracts relating to compensation.  Highlights of the C&DIs include the following:

  • An acquirer in a merger transaction that assumed the target company’s derivative securities does not need an exemption if, at the time of the grant by the target, the compensatory benefit plan under which the securities were issued permitted the assumption without the consent of the holders of the derivative securities.
  • Securities underlying the derivative securities are considered to have been sold on the date of the grant of the derivative securities. As such, so long as the target company complied with Rule 701 at the time the derivative securities assumed were originally granted, the exercise or conversion of the derivative securities would be exempt.
  • Post-merger, in determining the amount of securities that the acquirer may sell pursuant to Rule 701(d), the acquirer must include the aggregate sales price and amount of securities for which the target company claimed the Rule 701 exemption during the same 12-month period for which the acquirer is making the determination.
  • Post-merger, to calculate compliance with Rule 701(d)(2) going forward, an acquirer may use either (1) a pro forma balance sheet as of its most recent balance sheet date that reflects the merger as if it had occurred on that date, or (2) a balance sheet date after the merger that will reflect the total assets and outstanding securities of the combined entity.
  • Where an obligation to provide disclosure pursuant to Rule 701(e) is triggered, an issuer may elect to provide financial statements that follow the requirements of either Tier 1 or Tier 2 Regulation A offerings, without regard to whether the amount of sales that occurred pursuant to Rule 701 during the time period contemplated in Rule 701(e) would have required the issuer to follow the Tier 2 financial statement requirements in a Regulation A offering of the same amount.
  • For assumed derivative securities where the target company was required to provide Rule 701(e) disclosures post-merger, the acquirer would assume the disclosure obligation and would satisfy it by providing information required under Rule 701(e).
  • Post-merger, in determining whether the amount of securities the acquirer sold during any consecutive 12-month period exceeds $5 million, the acquirer must include any securities that the target company sold during the same period.

The C&DIs are available at: https://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm