The Bass, Berry & Sims Corporate & Securities Practice Group recently hosted another in a series of complimentary webinars exploring various public company-related securities law issues.

The most recent Securities Law Exchange webinar, Recent SEC Reporting Developments and Enforcement Insights, was held on November 19 and discussed recent developments from the Securities Exchange Commission (SEC), including best practices and lessons learned from recent changes under the Fixing America’s Surface Transportation (FAST) Act and the SEC’s new rule that extends “testing-the-waters” to all issuers. It also covered recent SEC guidance and enforcement actions impacting public companies.


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On November 5, the Securities and Exchange Commission (SEC) in a 3-2 decision voted to propose amendments to rules governing shareholder proposals in companies’ proxy statements.  These proposed amendments – which seek to revise Rule 14a-8’s eligibility requirements, one-proposal limit, and resubmission thresholds – follow on the heels of recent guidance issued by the Staff of the Division of Corporation Finance related to the no-action letter process for shareholder proposals.

The press release announcing the proposed changes noted that the changes are part of the SEC’s ongoing focus on improving proxy access and the ability of shareholders to exercise their rights to vote. SEC Chairman Jay Clayton commented in the release that the proposed changes are designed to “facilitate constructive engagement by long-term shareholders in a manner that would benefit all shareholders and our public capital markets.”  Not without controversy though, the rule revisions are receiving criticism from shareholder advocacy groups, while business-minded groups like the U.S. Chamber of Commerce have come out in support of the proposed changes.

Eligibility Requirements for Shareholders

The current eligibility requirements require that a shareholder proponent hold at least $2,000 or 1% of a company’s securities for at least a year to be eligible to submit a proposal.  The proposed revisions, eliminate the 1% threshold and replace the $2,000 threshold with the following three alternatives:


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Register for the November 19th WebinarPlease join the Bass, Berry & Sims Corporate & Securities Practice Group for a series of complimentary webinars exploring various public company – related securities law issues. These quarterly CLE programs will be an extension of this blog and will feature timely and practical guidance to SEC disclosure counsel on key topics of interest.

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In June of this year, the SEC issued a concept release that reviews the framework for exempt offerings, including several exemptions from registration under the Securities Act of 1933 that facilitate capital raising.  The concept release seeks comment on possible ways to simplify, harmonize and improve this exempt offering framework to expand investment opportunities while maintaining appropriate investor protections and promote capital formation.

To date, approximately 161 commentators have submitted letters to the SEC, and the SEC has posted memos related to seven meetings between SEC officials and outside parties concerning the rulemaking.  As a former Staffer that did a stint in the Office of Rulemaking, I can appreciate the hard work that is involved in summarizing all these letters and meetings.  (I actually had the job of summarizing comment letters in connection with a rulemaking I was involved with while on Staff.  It is actually very beneficial for the Staff to hear various viewpoints and expertise on any rulemaking, but it is also a tedious task that takes a lot of Staff hours and, for me at least, a very large spreadsheet!)


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Register for the Corporate & Securities Counsel Public Company Forum on December 12Bass, Berry & Sims invites you to join us for our inaugural Corporate & Securities Counsel Public Company Forum on Thursday, December 12.

This half-day program will feature timely and practical guidance on the latest developments in corporate and securities matters impacting public company in-house counsel.

Panel discussion topics will include:

  • Upcoming proxy season
  • Financial

The recent SEC enforcement action against ADT Inc. for its failure to comply with the SEC’s equal prominence requirements applicable to non-GAAP financial measures, as outlined in our recent blog post, is a clear reminder that public companies need to continue to be vigilant about the SEC’s non-GAAP financial measure rules.  Also, the Staff has continued to focus on non-GAAP compliance in its comment letters, with non-GAAP financial measures being one of the leading areas of Staff comment over the last couple of years.

There are different layers of the SEC’s non-GAAP financial measures rules which apply to public companies in varying circumstances, depending on the nature of the public disclosure.  Comprehensive knowledge regarding which level of the SEC’s non-GAAP financial measure rules applies to any particular disclosure is a key component when assessing legal considerations and risk in connection with the disclosure of non-GAAP financial measures.


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It’s been a busy late summer and early fall for the Staff of the Division of Corporation Finance (the Staff) as it relates to shareholder proposals and the Staff’s historical involvement in the no-action process related to those proposals.

On September 6, 2019, the Staff, focusing on how it could most efficiently and effectively provide guidance where appropriate regarding shareholder proposals, announced that it was changing its practices in this important area.  Historically, issuers that were seeking to exclude a shareholder proposal from their proxy statement on the grounds that the SEC’s proxy rules permitted such exclusions sought formal, written no-action relief from the Staff of the Division of Corporation Finance.

These no-action letters issued by the Staff would inform the issuer whether or not the Staff would recommend that the SEC’s Enforcement Division take action against the issuer for excluding a particular shareholder proposal.


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We recently wrote a three-part article series for Corporate Counsel highlighting recent trends warranting review by public companies and consideration as to whether to update their insider trading policies and training.

  • Part One offered practical guidance on mitigating risks associated with employees who may inadvertently share confidential information with others. As the benefits of remote work options increasingly pull the workforce out of the office, companies face risks from employees removing sensitive company documents from the secure confines of their offices and company databases. Because information removed from the safety of a corporate office or database is susceptible in many ways to being taken and misused by bad actors, it is important for in-house counsel to take steps to ensure their insider trading policies and training cover this area.


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On September 26, 2019, the SEC voted to adopt a new rule that extends a “test-the-waters” accommodation—currently a tool available only to emerging growth companies (EGCs)—to all issuers.  The rule will become effective 60 days after publication in the Federal Register.

The new rule and related amendments under the Securities Act of 1933 would enable all issuers (and its authorized representatives, including underwriters) to engage in test-the-waters communications with certain institutional investors regarding a contemplated registered securities offering prior to, or following, the filing of a registration statement related to such offering. These communications would be exempt from restrictions imposed by Section 5 of the Securities Act on written and oral offers prior to or after filing a registration statement and would be limited to qualified institutional buyers (QIBs) and institutional accredited investors (IAIs).

New Rule 163B

New Securities Act Rule 163B will permit any issuer, or any person authorized to act on its behalf, to engage in oral or written communications with potential investors that are, or are reasonably believed to be, QIBs or IAIs, either prior to or following the filing of a registration statement, to determine whether such investors might have an interest in a contemplated registered securities offering.  The rule is non-exclusive and an issuer may rely on other Securities Act communications rules or exemptions when determining how, when, and what to communicate about a contemplated securities offering.


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It’s not too often we see Dick Clark and Ryan Seacrest mentioned in SEC comments, so this recent SEC comment letter issued to Planet Fitness caught our attention.  The Staff’s letter to Planet Fitness indicates that it performed a full review on the company’s Annual Report on Form 10-K, which included its definitive proxy statement incorporated by reference.

(You can tell it was a full review (legal and accounting) because the first sentence of the letter says, “We have reviewed your filing and have the following comments.”  In contrast, a limited review (or monitor) would have said something like “We have limited our review of your filing to the financial statements and related disclosures and have the following comments.”)


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