On December 18, 2018, the SEC issued a request for public comment soliciting input on the nature, content and timing of earnings releases and quarterly reports of companies that are obligated to file reports with the SEC as well as the relationship between the periodic reports that reporting companies must provide and the earnings releases that they choose to distribute. With this request for comment, the SEC is seeking to continue the ongoing dialogue about whether the current reporting regime and practices of reporting companies is overly burdensome or contributing to “short-termism”.

Commenting on the matter, SEC Chairman, Jay Clayton, said “[t]here is ongoing public debate regarding the effects of mandated quarterly reports and the prevalence of optional quarterly guidance.”  “Our markets thirst for high-quality, timely information regarding company performance and material corporate events.  We recognize the importance of this information to well-functioning and fair capital markets.  We also recognize the need for companies and investors to plan for the long term.  Our rules should reflect these realities.  I look forward to receiving thoughtful comments as we think about ways to encourage long-term investment in our country.”Continue Reading SEC Request for Comment on Earnings Releases and Periodic Reports

The most recent edition of The Business Lawyer, published by the ABA’s Business Law Section, includes its Annual Review of Federal Securities Regulation prepared by its Subcommittee on Annual Review from the Committee on Federal Regulation of Securities. The Review outlines significant developments in federal securities law and regulation in 2017. The Review is

Public companies that engage in capital raising activities from time to time must consider whether it is advisable to have an effective shelf registration statement on Form S-3 on file in advance of raising capital, or whether to simply wait to file a Form S-3 until such time that the company desires to raise capital.

Background

As background, shelf registration statements may be utilized by public companies eligible to use Form S-3 (which generally requires, among other things, that an issuer have at least $75 million in non-affiliate common equity public float and have filed all required SEC reports over the last 12 months), to register the issuance of various classes of the company’s securities on a delayed or continuous basis, to be issued in public offerings from time to time, either by the issuer or selling security holders.  At the time of an offering, these securities are then sold in a “take down” off the shelf utilizing a prospectus supplement describing (among other things) the terms of the offering and incorporating by reference information about the issuer.  Shelf registration statements generally only remain effective for three years.Continue Reading Form S-3: To File or Not to File, That is the Question . . .

Now that the SEC’s new rules on exhibit hyperlinks are live as of September 1, 2017, we have updated our March blog post with the frequently asked question below regarding exhibit indexes.

Where should we put the exhibit index now? Can we combine the list of exhibits and the exhibit index?

In connection with the SEC’s March 2017 amendments implementing the hyperlink requirement, the SEC also amended the rules pertaining to the placement of the exhibit index, which had previously required the exhibit index to “precede immediately the exhibits filed with such registration statement.” As amended, Rule 102(d) of Regulation S-T and Rule 601(a)(2) of Regulation S-K now require the exhibit index to “appear before the required signatures in the registrant statement or report.” Although exhibit index practice has varied, there is some ambiguity as to whether the new rules require a separate exhibit index before the signature page and the exhibits themselves. For example, while some companies are combining the exhibit table with the exhibit index and placing the latter before the signature page, others have been retaining a separate exhibit table and exhibit index and move the latter above the signatures.Continue Reading Updated: FAQ on New SEC Rules on Exhibit Hyperlinks – Exhibit Indexes

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.Continue Reading 7 Answers to FAQs About the New SEC Guidance for Draft Registration Statements

With the September 1, 2017, deadline fast approaching for complying with the SEC’s new rules on exhibit hyperlinks, we have updated our March blog post with the frequently asked question below.

How does one link to an exhibit in a 30-year old registration statement that was filed as one gigantic ASCII file? The only available

The firm recently released an updated Blueprint for an IPO, a guide to help companies understand the process of going public and the new challenges they will face once their securities are publicly traded. An IPO is at the same time exciting and very demanding on a company’s management team. IPO candidates face for the first time the expansive regulatory scheme administered by the Securities and Exchange Commission (SEC) and must deal with corporate governance processes that are much different than what they had as private companies.

The newly released guide is organized in an easy to use Q&A format detailing many of the ongoing obligations a company will face after it becomes a public company.

Below is a list of the types of questions that are answered in the newest edition of the Blueprint for an IPO.Continue Reading Bass, Berry & Sims Releases Updated Blueprint for an IPO

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.Continue Reading SEC Extends Confidential Review of Certain Registration Statements to Non-EGCs

Securities and Shareholder Litigation 2017: A Look AheadWhile not necessarily as eventful as 2015, 2016 saw courts interpret and build upon major decisions from prior years, and have set up at least one important issue for consideration by the U.S. Supreme Court. 2016 also featured several important legal developments that should continue to impact both private litigation and public enforcement throughout 2017, including:

  • SEC Whistleblower Program. By the time the SEC closed its 2016 fiscal year in September, it had filed a record number of enforcement actions. In addition, the SEC’s whistleblower program awarded more than $57 million to 13 whistleblowers during the year, almost as much as in all previous years combined. The big question will be whether the Trump administration will allow this trend to continue.

Continue Reading Bass, Berry & Sims Securities and Shareholder Litigation Group Publishes 2017: A Look Ahead

Blueprint for an IPOBass, Berry & Sims is pleased to provide its Blueprint for an IPO to help companies understand the process of going public and the new challenges they will face once their securities are publicly traded. An initial public offering (IPO) is a transaction in which a company’s securities are offered to the public for the first time. Companies go public to raise capital to fuel growth, pay down debt and provide liquidity to shareholders, among other things. Going public is a corporate milestone, particularly in the Sarbanes-Oxley Act era of corporate reform. An IPO is at the same time exciting and very demanding on a company’s management team. IPO candidates face for the first time the expansive regulatory scheme administered by the Securities and Exchange Commission (SEC) and must deal with corporate governance processes that are much different than what they had as private companies.
Continue Reading Bass, Berry & Sims Releases Blueprint for an IPO