As we arrive at the height of the annual meeting season this May, many public companies will be holding say-when-on-pay votes this month in light of the requirement under the Dodd-Frank Act to hold such vote every six years and the fact that many public companies first held this vote in 2011 following the enactment of Dodd-Frank. In this regard, registrants should be reminded of the requirement under Item 5.07(d) to report the determination of the registrant, in light of the shareholder vote on say-when-on-pay, regarding how frequently the registrant intends to hold say-on-pay votes until the next required say-when-on-pay shareholder vote. Under the Form 8-K rules, this disclosure may be made in the Form 8-K disclosing the annual meeting voting results or in a separate Form 8-K amendment filed within 150 days following the date of the annual meeting (but, in any event no later than 60 days prior to the Rule 14a-8 shareholder proposal submission deadline).

Continue Reading Annual Meeting 8-K: Don’t Forget SWOP Determination

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

Recently, the SEC adopted technical amendments for self-executing provisions of the JOBS Act—mostly relating to EGCs.

One important update that impacts virtually all companies is the update related to amending the cover pages for numerous filings. Broadly speaking, the cover page has been revised to include a “check the box” item to indicate that the person filing the report is an “emerging growth company” and an additional box to check as follows: “If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.”

Continue Reading Effective Today – New EGC “Check the Box” on Cover Pages of Most SEC Forms, including 8-K, S-1/3/4/11 and 10-K/Q

This post was updated on August 16, 2017, and September 12, 2017, to include the eleventh and twelfth FAQs, respectively.

1. What are the new rules on exhibit hyperlinks generally?
On March 1, 2017, the SEC voted to adopt new rules and form amendments to make it easier for investors and other market participants to find and access exhibits in registration statements and periodic reports. The amendments will require registrants to include a hyperlink to each exhibit in the filing’s exhibit index.  Currently, someone seeking to retrieve and access an exhibit that has been incorporated by reference must review the exhibit index to determine the filing in which the exhibit is included, and then must search through the registrant’s filings to locate the relevant filing.

The amendments require registrants that file registration statements or reports subject to the exhibit requirements under Item 601 of Regulation S-K, or that file Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of these filings, and to submit such registration statements and reports on EDGAR in HyperText Markup Language (HTML) format.

Continue Reading 10 FAQs on the New SEC Rules on Exhibit Hyperlinks (plus two bonus questions!)

In the past couple days, much has been written about the contents of a leaked memo from Jeb Hersarling, Chair of the House Financial Services Committee, to the Committee’s Leadership Team. The memo, of which we have obtained a copy and posted here, outlines proposed changes from the original Financial CHOICE Act, introduced last year. The original version of the Financial CHOICE Act is located here.

According to sources, the current word (for whatever current “word” is worth nowadays) is that the revised draft of the Financial CHOICE Act may come out end of month with a pretty quick mark-up in March. Additionally, some think that if the repeal of the Durbin Amendment (which limits the fees that may be charged to retailers for debit card processing) remains in the bill, then that provision may hold it all up given that opposition doesn’t necessarily divide along party lines, but rather along who has a large bank or retail headquarter in their district.

Continue Reading What to Expect in the New Financial CHOICE Act (2.0)

Late Tuesday evening, Acting Chairman Michael Piwowar issued two statements — available here and here — announcing that he was directing the SEC Staff to reconsider whether the 2014 guidance on the conflict minerals rule is still appropriate and whether any additional relief is warranted. As a result, the SEC has created a website where interested parties can submit comments.

Continue Reading SEC Reconsidering Conflict Minerals Rule Implementation

Following the completion of one of the most divisive presidential elections in U.S. history, the election of President Trump and the retention of Republican majorities in both the U.S. Senate and House will impact the public disclosures of many U.S. public companies. The expectation of the securities markets that the results of these elections will significantly impact the prospects of many companies was reflected in the sharp movements in the stock prices in various sectors which occurred shortly after the 2016 elections. While the overall stock market trend since the 2016 elections has been positive, companies in certain sectors such as manufacturing and financial institutions have achieved gains significantly in excess of market norms, with companies in other sectors, such as utility and certain healthcare sectors, having underperformed in relation to market norms (although some healthcare companies have recovered from stock market declines seen in the immediate aftermath of the elections).

Continue Reading The Trump Effect: The Impact of the 2016 Elections on Public Company Securities Disclosures

Jay Clayton
Jay Clayton

President-elect Donald Trump on Wednesday chose Jay Clayton, a former Sullivan & Cromwell deal lawyer, as his nominee to head the SEC.  Below are a few quick facts about his pick.

Bio Highlights:

  • Practice involves public and private mergers and acquisitions transactions, capital markets offerings, regulatory and enforcement proceedings, and other matters where multidisciplinary advice and experience is valued.
  • Clayton also advises several high-net-worth families regarding their public and private investments.
  • Thought leadership posted on his bio indicates significant interest/experience in cybersecurity.
  • JD – University of Pennsylvania, 1993

Continue Reading Quick Fact Sheet on Trump’s Pick for SEC Chair, Jay Clayton

ISS and Glass Lewis recently updated their proxy voting guidelines in advance of the 2017 proxy season. The updates to the ISS guidelines will be effective for meetings beginning in February 1, 2017, and the updates to the Glass Lewis guidelines will be effective for meetings beginning in January 1, 2017.

Unlike in certain past years, the revisions to the proxy voting guidelines of ISS and Glass Lewis will not significantly impact the public company corporate governance landscape or impact most public companies.  The changes made to the ISS guidelines include:

  • tightening the overboarding policy of ISS (by lowering the number of public company board positions it considers acceptable for non-CEO directors from six to five),
  • certain technical revisions to ISS guidelines with respect to proposals to amend or approve equity-based compensation plans, and
  • updating the policies of ISS with respect to proposals to address non-employee director compensation.

Continue Reading ISS and Glass Lewis: Proxy Season Preparation

On December 5, 2016, Wes Bricker, the SEC’s Chief Accountant, delivered an insightful keynote address before the 2016 AICPA Conference on current SEC and PCAOB developments. The speech was entitled, “Working Together to Advance High Quality Information in the Capital Markets.” The speech covered a number of diverse topics, including an update on the Office of Chief Accountant, internal control over financial reporting, revenue recognition implementation, non-GAAP reporting, valuation practices, auditor independence, the PCAOB, IFRS and audit committees, among others. The full speech is linked here. Below is an excerpt of Mr. Bricker’s comments directed to audit committees, which included questions from audit committee members that he found helpful during his time as an audit engagement partner in generating dialogue:

Continue Reading SEC Chief Accountant Wes Bricker Delivers Keynote Address Before the 2016 AICPA Conference

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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