On May 29, 2018, President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Act”) into law.  While much of the Act centers on regulatory relief for smaller financial institutions and community banks, Section 508 of the Act adopts a major change to Regulation A+.  Prior to the Act, Regulation A+ was not available to an existing public company (i.e., a company reporting under Section 13 or 15(d) of the Securities Exchange Act of 1934).  Section 508 of the Act directs the SEC to amend Regulation A+ to allow a public company to use Regulation A+ to offer its securities.  However, Section 508 of the Act is not self-effecting, which means that, until the SEC adopts rules implementing Section 508, only non-public companies may use Regulation A+.  In addition to allowing public companies to use Regulation A+, the Act also directs the SEC to amend its rules to say that a public company that conducts a Tier 2 offering will satisfy its Regulation A+’s periodic reporting obligations by complying with its existing reporting obligations under Section 13 or Section 15(d).

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On March 23, 2018, President Trump signed into legislation the Consolidated Appropriations Act of 2018, also known as the “omnibus spending package.” Included in Title VIII therein is legislation titled the Small Business Credit Availability Act (SBCAA) that includes certain regulations under the federal securities laws impacting business development companies (BDCs).  Among other items, the SBCAA allows BDCs to incur significantly more debt and rely on relaxed SEC communication and offering rules that were previously available to operating companies.

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We thought you may find of interest prepared remarks by SEC Chairman Jay Clayton at the annual Government-Business Forum on Small Business Capital Formation held on November 30, 2017, where he stated, “In the coming months I anticipate that the Commission will consider adopting rules to expand the definition of ‘smaller reporting company’ to permit additional companies to avail themselves of scaled disclosure requirements.” A full transcript of the speech is available at the SEC’s website.

Proposed Rules Would Change Qualifications for Smaller Reporting Companies

As you may recall, in July 2016 the SEC voted to propose amendments that would increase the financial thresholds in the “smaller reporting company” definition. The proposed rules would enable a company with less than $250 million of public float to provide scaled disclosures as a smaller reporting company, as compared to the $75 million threshold under the current definition. The SEC did not, however, propose to increase the $75 million threshold in the “accelerated filer” definition.


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Recently, the house panel approved to raise the Reg A+ IPO limit to $75 million designed to bolster capital-raising efforts. The “moving up [to $75 million] could have a positive impact for smaller companies because it may attract some of the more traditional underwriters to the process. By attracting more sophisticated parties to the transaction,

In a Bloomberg BNA article, Bass, Berry & Sims attorney Jay Knight provided insight on what future additional updates the SEC Staff could be focusing on following the Commission's announcement of proposed amendments to Regulation S-K last week.In a Bloomberg BNA article, I provided insight on what future additional updates the SEC Staff could be focusing on following the Commission’s announcement of proposed amendments to Regulation S-K last week. The article quotes Elizabeth Murphy, an associate director in the SEC Division of Corporation Finance, from an October 18 Association of Corporate Counsel

On October 11, the SEC proposed amendments to modernize and simplify disclosure requirements in Regulation S-K, which were mandated by the Fixing America’s Surface Transportation (FAST) Act. In large part, the proposed amendments follow the recommendations of a November 2016 report from the SEC staff.  As one SEC commissioner put it, the incremental adjustments to Regulation S-K are meant to “prune” the SEC’s existing disclosure regime rather than as “an exercise in slash-and-burn clearcutting.”

Below are six highlights from the SEC’s proposed amendments to Regulation S-K:

  1. Rules for Management’s Discussion and Analysis (MD&A) would be amended to clarify that a registrant need only provide a period-to-period comparison for the two most recent fiscal years presented in the financial statements and may hyperlink to the prior year’s annual report for additional period-to-period comparison. The proposed amendments would require hyperlinks to information that is incorporated by reference if that information is available on EDGAR. Instruction 1 to Item 303(a).


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On August 5, 2015, the SEC adopted new rules implementing the pay ratio disclosure requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Section 953(b) of the Dodd-Frank Act required the SEC to adopt rules requiring reporting companies to disclose the ratio of the annual compensation of the company’s median employee to the annual compensation of its principal executive officer. These rules will become effective generally for companies in their Form 10-K for the 2017 fiscal year or in their proxy statement for the 2018 annual meeting. Below are some frequently asked questions that companies should be considering now in preparing for this new disclosure.

1. What are the new rules on pay ratio generally?

The new rules are contained in a new Item 402(u) of Regulation S-K added by the SEC. Item 402(u) generally requires companies to disclose

  • the median of the annual total compensation of all company employees other than the company principal executive officer (PEO),
  • the PEO’s annual total compensation, and
  • the ratio between the two numbers.


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Last week, the SEC’s Division of Corporation Finance issued updated guidance on processing procedures for draft registration statements. Below is a FAQ summary table we have prepared related to this new guidance.

There are some nuances in the guidance, so please consult with outside securities counsel before omitting any financial statements in your filing. Contact any member of our Corporate & Securities practice for more information.


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Last month, the Staff of the SEC’s Division of Corporation Finance announced that, as part of the Division’s ongoing efforts to facilitate capital formation, all issuers are now permitted to submit draft registration statements relating to IPOs and Exchange Act Section 12(b) registration (e.g., spin-offs) to the Staff for nonpublic (i.e., confidential) review.

Previously, nonpublic review was available only to emerging growth companies (EGCs), as authorized by the JOBS Act, and in certain circumstances to foreign private issuers. Nonpublic submission of registration statements makes it possible for companies to avoid alerting the market of offering plans before the company is certain that it will move forward with any offering.


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