Bloomberg BNA announced the recently updated SEC Reporting Issues for Foreign Private Issuers (Portfolio 5507) authored by Morrison & Foerster partners Anna T. Pinedo and James R. Tanenbaum.

This portfolio serves as a practical resource for both practitioners and foreign private issuers.  This new edition explains in detail various SEC proposed and finalized rules and regulations issued in 2016. It analyzes how those regulations would affect foreign private issuers–including the updated SEC staff guidance on how foreign private issuers should disclose the use of non-GAAP financial measures.

On February 28, 2017, the SEC’s Division of Economic and Risk Analysis (DERA) and New York University’s Salomon Center for the Study of Financial Institutions will host a dialogue on Securities Crowdfunding in the U.S.  The event, held at the SEC’s headquarters, will include a discussion on the economic rationale and legal framework for securities crowdfunding; a discussion on investor protection and capital formation in securities crowdfunding; and a presentation on the empirical evidence and data on securities crowdfunding.

Welcome remarks will start at 9:15 am.  The event is open to the public and will also be webcast on the SEC’s website.

Thursday, March 9, 2017
12:30 p.m. – 2:00 p.m. EST

As the Trump Administration takes charge in 2017, the only thing that seems inevitable is that the regulatory and enforcement outlook will change. Initial indications point to a desire to relax or repeal certain regulations that may be regarded as burdensome to public companies. Also, proposed legislation would relax certain corporate governance and compensation-related measures that formed part of the Dodd-Frank Act. Proposed legislation also would address the types of cost-benefit analysis that would be required to support proposed regulation.

Don’t miss this chance to learn SEC regulations’ status and how they will likely change from experts who have been directly involved in rule-making and implementation of U.S. securities laws.

Topics to be discussed include:

  • Rules that were proposed but not adopted by the SEC as part of the Dodd-Frank Act rule-making mandate;
  • What to expect as far as corporate governance and executive compensation requirements;
  • Final rules adopted pursuant to the Dodd-Frank Act mandate relating to extractive minerals and specialized disclosures;
  • Future of the Disclosure Effectiveness initiative;
  • Likely status of the rules proposed by the SEC and not yet adopted;
  • Proposed changes affecting investment companies and their likely status; and
  • Anticipated enforcement areas of focus.

Speakers:

  • Andrew J. “Buddy” Donohue
    Former Chief of Staff, Director of Enforcement, and Director of Investment Management, SEC
  • Roberta Karmel
    Centennial Professor of Law, Brooklyn Law School,
    former SEC Commissioner
  • Troy Paredes
    Paredes Strategies LLC, former SEC Commissioner
  • Anna Pinedo
    Partner, Morrison & Foerster LLP
  • Linda Chatman Thomsen
    Partner, Davis Polk & Wardwell LLP
    former Director of Enforcement, SEC

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

Please contact cmg-events@mofo.com for a promotional code for discounted $99 tuition.

At the 35th Annual Federal Securities Institute, a representative of the Securities and Exchange Commission shared some market data.

From its effective date in June 2015 through December 2016, there were 171 Regulation A offerings filed. Of these, 76 were Tier 1 offerings and 95 were Tier 2 offerings. The aggregate proceeds sought to be raised in the filed deals was approximately $3 billion. There were 97 offerings qualified. Thus far, $238 million has been reported sold, though more complete data will be available when issuers file their reports in a few months.

From its May 2016 effective date, 163 companies have filed to undertake crowdfunded offerings. The average minimum raise sought is $100,000 and the average maximum raise is $647,000. The average time period has been between four and six months. 28 deals have been completed raising approximately $8.1 milllion. 24 issuers failed to meet the minimum amount sought and withdrew their offerings.

On February 1, 2017, the NYSE issued separate Listed Company Compliance Guidance memoranda for both U.S. companies (“Domestic Companies”) and foreign private issuers (“FPIs”) listed on the NYSE. Below is a brief overview of several of the developments and ongoing policies covered in the memoranda:

  • Proposed Rule Changes Related to Shortened Settlement Cycle. Consistent with the 2016 proposal by the SEC to amend Exchange Act Rule 15c6-1(a) to shorten the standard settlement cycle from T+3 to T+2, the NYSE announced that it has proposed to adopt new NYSE rules to reflect “regular way” settlement as occurring on T+2.
  • NYSE MKT Timely Alert/Material News Policy. The NYSE reminded listed companies that Part 4 of the NYSE’s Company Guide requires listed companies to release promptly news or information which might be reasonably expected to materially affect the market for the company’s securities.
  • Changes to the Date of a Listed Company’s Earnings Release. Given that a change in the earnings announcement date can sometimes affect the trading price of a company’s securities, the NYSE stated that it is important for listed companies to promptly and broadly disseminate to the market: (i) news of the scheduling of earnings announcements and (ii) changes in that schedule.
  • Record Dates. The NYSE explained that listed companies are required to notify the NYSE at least 10 calendar days in advance of all record dates set for any purpose.
  • Meeting Dates. The NYSE recommended that shareholders receive notice of the listed company’s required annual shareholders’ meeting, along with proxy materials, at least 20 days before the meeting date.
  • Shareholder Meetings and Proxy Materials. The NYSE reminded listed companies that they must solicit proxies for any annual or special meetings of shareholders, and must file three definitive copies of all proxy materials with the NYSE no later than the mailing date of the materials.
  • Redemption and Conversion of Listed Securities. The NYSE noted that listed companies should promptly contact their Corporate Actions analyst prior to issuing an announcement about the redemption or conversion of a listed security.

Copies of the memoranda are available at:

https://www.nyse.com/publicdocs/nyse/regulation/nyse-mkt/2017_NYSE_MKT_Listed_Company_Compliance_Guidance_Memo_for_Domestic_Companies.pdf

https://www.nyse.com/publicdocs/nyse/regulation/nyse-mkt/2017_NYSE_MKT_Listed_Company_Compliance_Guidance_Memo_for_Foreign_Private_Issuers.pdf

Likely, this is only the beginning. Senator Inhofe and Representative Huizenga filed Congressional Review Act Resolution relating to the Securities and Exchange Commission’s final rule regarding the disclosure of certain payments made by resource extraction issuers. The rule was required by Section 1504 of the Dodd-Frank Act. In the statement regarding the CRA, Senator Inhofe claimed that the rule “would put [U.S.] companies at a disadvantage by forcing them to disclose confidential business information to their private and international competitors.”

On January 17, Chair White delivered a speech at The Economic Club of New York, which was titled “The SEC after the Financial Crisis: Protecting Investors, Preserving Markets.”  Chair White commented on the Securities and Exchange Commission’s achievements during the financial crisis era, as well as other areas of focus, such as modernizing the regulation of asset management, addressing equity market structure issues, and related matters.  Chair White noted that an area for further work for the Commission is addressing financial responsibility rules for broker-dealers.  Chair White also noted that the Staff has prepared a public request for comment on Industry Guide 3 for financial institutions, which awaits the approval of the Commission for release.

In these, her last remarks as Chair, she commented on the role of the Commission, “for the SEC to be a strong market regulator, wiser from the experience of the financial crisis, we must be ready to use the full array of tools available to us – not relying on disclosure and enforcement alone.  And we must do so with a fierce independence in applying our expert, best judgment to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate the formation of capital by the companies whose innovation and growth drives the American economy.”

Chair White also addressed the CHOICE Act and other measures designed to address agency rulemaking, noting:

“Another current trend pushing against the independence of the Commission are the legislative proposals from Congress seeking to remake our rulemaking process.  The House passed a bill just last week that would impose conflicting, burdensome, and needlessly detailed requirements regarding economic matters in Commission rulemaking that would provide no benefit to investors beyond the exhaustive economic analysis we already undertake.  These requirements would also prevent the Commission from responding timely to market developments or risks that could lead to a market crisis.  And elements of the CHOICE Act, which could be re‑introduced this session, would similarly undermine agency rulemaking as well as cripple our enforcement capabilities.  The next Commission must continue to challenge these efforts, and so should all of you.”

The full text is available here:  https://www.sec.gov/news/speech/the-sec-after-the-financial-crisis.html.

SEC disclosure requirements have prompted debate among key stakeholders regarding how to strike the right balance, weighing investor protection concerns and regulatory burdens. Partner Anna Pinedo is quoted in MergerMarket’s report on disclosure effectiveness. Read the report here: http://mergermarketgroup.com/wp-content/uploads/2016/12/Vintage-Group_Newsletter-3-2016_Final-LR.pdf.

The Chair of the Securities and Exchange Commission Mary Jo White recently commented on the significance of high-quality accounting standards.  The speech noted the need to support continued work toward the globally accepted accounting standards.  In recent months, representatives of the Office of the Chief Accountant within the Commission had noted that the effort to move toward IFRS was not considered a near-term priority.  Chair White offered compelling statistics.  For example, she noted that U.S. investors invest directly in the securities of many foreign private issuers that apply IFRS in filings with the Commission.  As of September 2016, these companies alone represented a worldwide market capitalization in excess of $7 trillion across more than 500 companies.  As a result, Chair White noted that work toward continued convergence of standards and priorities between the FASB and the IASB should be encouraged.   See the full speech at:  https://www.sec.gov/news/statement/white-2016-01-05.html.