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Category Archives: SEC News

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SEC Requires Floating NAV for Institutional Money Market Funds; IRS Eases Tax Reporting Burden for Fund Investors

Posted in SEC News

A divided Securities and Exchange Commission today adopted rules that will require floating net asset values (NAVs) for institutional money market funds and give most money market funds the discretion to impose liquidity fees and gates.  The 3-2 vote, which closes the latest tumultuous chapter of money market fund regulatory reform, will fundamentally change the way that… Continue Reading

Financial Services Committee Hearing May Provide Insights

Posted in JOBS Act News, SEC News

This Thursday, July 24th, the Capital Markets and Government Sponsored Enterprises Subcommittee will hold a hearing with Keith Higgins, Director of the SEC’s Division of Corporation Finance, to review the SEC’s rule proposals to implement the JOBS Act and the Dodd-Frank Act, proxy advisory firms, as well as Chair Mary Jo White’s call for a… Continue Reading

SEC Staff Provides Rule 506(c) Verification Guidance

Posted in Private Placements, Rule 506 Rulemaking, SEC News

The SEC Staff recently provided further guidance on the provisions of Rule 506(c) of Regulation D which permit the use of general solicitation and general advertising when sales are made only to accredited investors and the issuer verifies the accredited investor status of the purchasers.  The Staff has now clarified certain aspects of the verification… Continue Reading

SEC Staff Closes Loophole on BDC Asset Coverage Requirements

Posted in 1940 Act, BDCs, Investment Management, SBIC, SEC News

In a Guidance Update published on June 30, 2014 by the SEC’s Division of Investment Management, the staff closed a loophole that allowed business development companies (BDCs) with wholly owned Small Business Investment Company (SBIC) subsidiaries to avoid meeting asset coverage requirements when the SBIC subsidiaries issue debt that is not guaranteed by the Small… Continue Reading

SEC Announces Order for Tick Size Pilot Plan

Posted in SEC News

On June 25, 2014, the Securities and Exchange Commission (the “SEC”) announced that it had ordered the national securities exchanges and the Financial Industry Regulatory Authority, Inc. (“FINRA”) to act jointly to develop and file with the SEC a national market system plan to implement a targeted 12 month pilot program that will widen minimum… Continue Reading

Investor Advisory Committee

Posted in SEC News

On July 10, the Investment Advisory Committee will be meeting to consider various topics, including the definition of the term “accredited investor.”  The Committee had previously discussed amendments to the natural persons prong of the definition to better account for the financial sophistication of purchasers.  Meetings are webcast. Read the meeting notice here. Read the… Continue Reading

SEC Staff Guidance on the Use of Social Media in Securities Offerings, Tender Offers, Business Combinations and Proxy Contests

Posted in SEC News

The staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission recently provided guidance on the applying its rules regarding communications in connection with securities offerings, tender offers, business combinations and proxy contests when statements are made utilizing certain social media channels. The staff’s guidance permits the use of a hyperlink… Continue Reading

Disclosure Overload and “Cutting the Clutter”

Posted in JOBS Act News, SEC News

In various speeches recently, SEC representatives have addressed the need for disclosure reform following the December 2013 release of the JOBS Act-mandated Regulation S-K study.  The disclosure review will begin by considering the disclosures that flow into periodic reports.  In addition, the Staff also will evaluate whether Industry Guides and form specific disclosures should be… Continue Reading

Recommendations of the SEC’s Investment Advisory Committee Regarding Crowdfunding Rules

Posted in Crowdfunding, SEC News

On April 10, 2014, the Investor Advisory Committee (the “IAC”) of the Securities and Exchange Commission (the “SEC”) held a meeting during which it recommended that the SEC adopt crowdfunding rules that are both consistent with the Dodd-Frank Act and commensurate with the risks inherent in allowing early stage start-up companies to sell securities based… Continue Reading

Foreign (non-U.S.) Issuers

Posted in JOBS Act News, SEC News

The SEC recently provided some data on registered offerings by foreign issuers, noting that In 2013, there were approximately 50 new foreign registrants; Since the passage of the JOBS Act, there have been over 100 foreign private issuers making confidential submissions to the SEC; Over half of these submissions resulted in public filings of registration… Continue Reading

ECCF

Posted in SEC News

Recently, Craig Lewis, the Chief Economist and Director of the SEC’s Division of Economic and Risk Analysis, commented (see speech at:  http://www.sec.gov/News/Speech/Detail/Speech/1370541497283#.U08MNVTD_zY ) on the economic impact of various JOBS Act reforms, or the effects on “efficiency, competition, and capital formation” (ECCF). In his remarks, Lewis notes that smaller companies may face informational frictions that… Continue Reading

JOBS Act: From A+ to D

Posted in JOBS Act News, Regulation A+, SEC News

Today is the end of the comment period on the SEC’s proposing release concerning Regulation A+.  A number of comment letters already have been filed and are available here: http://www.sec.gov/comments/s7-11-13/s71113.shtml.  Additional comment letters are likely to be received in the next few days.  The letters overwhelmingly support the SEC’s approach. In a recent speech, SEC… Continue Reading

Testing the Waters

Posted in Emerging Growth Company Status, IPO On-Ramp, SEC News

An issuer that is considering or that has commenced an initial public offering (“IPO”) should take special care to familiarize itself with the communications rules applicable to offerings. First, an issuer should keep in mind that communications may be viewed as impermissible “gun jumping” activities designed to condition the market for the issuer’s securities.  Second,… Continue Reading

What’s Next for the Commission?

Posted in JOBS Act News, SEC News

At a recent program, S.E.C. Speaks, Chair White noted that the Commission continues to move forward to complete rulemakings required under the JOBS Act related to exempt offerings.  She noted that while the Act makes it easier for companies to remain private longer and to rely on exempt offerings, the Commission will devote attention to… Continue Reading

NASAA Comments on SEC’s Regulation A+ Proposal

Posted in Regulation A+, SEC News

Not unexpectedly, on February 19, 2014, the North American Securities Administrators Association sent a letter to the SEC objecting to the preemption of state authority over small corporate offerings by the SEC in its Regulation A+ Proposal and requesting a meeting with Chair White and the Corporate Finance leadership. The Proposal preempts state securities law… Continue Reading

SEC Updates Guidance on Share-Based Compensation Disclosures in IPOs

Posted in IPO On-Ramp, SEC News

On February 6, 2014, the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) updated Section 9520 of its Financial Reporting Manual regarding share-based compensation disclosures in initial public offering (“IPO”) prospectuses.  The updates revise prior SEC guidance recommending that issuers, in their disclosure of pre-IPO share-based compensation, include tabular disclosure (for… Continue Reading

Implementing Regulation A+

Posted in Events, Regulation A+, SEC News

On December 18, 2013, the SEC proposed rules to implement the mandate of Title IV of the JOBS Act by creating a framework for Section 3(b)(2) offerings. The JOBS Act permits non-reporting companies to conduct “mini” public offerings, or Regulation A+ exempt offerings to raise up to $50 million in proceeds. A Regulation A+ offering… Continue Reading

Tick Size

Posted in SEC News

The Small Cap Liquidity Reform Act (H.R. 3448) is scheduled for a vote on February 11th.  The bill (which was approved by the House Financial Services Committee in 2013) would implement a pilot program during which EGCs would be permitted to choose their tick size for prices greater than $1.00.  This comes after the Investor… Continue Reading

SEC Grants Relief for Private Company M&A Brokers

Posted in Broker-Dealer Registration, SEC News

On January 31, 2014, the SEC issued a ground-breaking no-action letter, taking the position that a financial intermediary that limits its business activity to advising privately held companies in M&A transactions need not register as a broker-dealer. The no-action letter, as revised on February 4, 2014, may be found here: http://www.sec.gov/divisions/marketreg/mr-noaction/2014/ma-brokers-013114.pdf. This no-action letter departs… Continue Reading

Chair White’s Guidance

Posted in SEC News

SEC Chair White made remarks at the Securities Regulation Institute (see speech here: http://www.sec.gov/News/Speech/Detail/Speech/1370540677500) that provided insight on the SEC’s progress on JOBS Act implementation.  She noted that, based on information collected by the SEC’s Division of Economic and Risk Analysis through December 31, approximately 500 offerings were conducted, raising approximately $5.8 billion, in reliance… Continue Reading

Nasdaq Gets a Necessary Regulatory Approval For Private Market

Posted in SEC News

In March 2013, Nasdaq and SharesPost announced Nasdaq Private Market (NPM), a joint venture intended to create a preeminent marketplace for private growth companies.  The road to full regulatory approval has been long but in January 2014, FINRA approved the registration as a broker-dealer of NPM Securities, LLC, a Nasdaq OMX Group brokerage unit, a… Continue Reading

Investor Advisory Committee Meeting Scheduled

Posted in SEC News

The SEC announced the next meeting of the Investment Advisory Committee, which will be held on January 31st.  The agenda includes a discussion of, among other things, decimalization and crowdfunding.  The notice of the meeting is available here:  http://www.sec.gov/rules/other/2014/33-9510.pdf.