In March 2022, the Securities and Exchange Commission (SEC) proposed sweeping new rules to regulate the disclosures and liabilities associated special purpose acquisition companies (SPACs). The proposing release is available here. The proposals were aimed at enhancing disclosures and liabilities in connection with SPAC IPOs as well as the subsequent business combinations (De-SPAC Transactions) between SPACs and private operating companies.

Continue Reading Reverberations Felt from SEC’s SPAC Proposal Even Before Rules Are Adopted

Last week, the Securities and Exchange Commission (SEC) voted 3-2 to take the following actions:

  • Propose new amendments to Rule 14a-8, the shareholder proposal rule.
  • Adopt new amendments to the rules regarding proxy advisory firms, such as ISS and Glass Lewis.

Continue Reading SEC Proposes Amendment to the Shareholder Proposals Rule (14a-8) and Adopts Amendments to Rules Impacting Proxy Advisory Firms

I recently authored an article highlighting the latest updates in human capital disclosure requirements for public companies since the Securities Exchange Commission (SEC) imposed new requirements in late 2020.

While public companies were historically only required to disclose their gross headcount as it relates to human capital, the 2020 changes added a broader requirement that companies include in their filings a description of their human capital resources, which includes any human capital measures or objectives that the company’s management team focuses on when running the business.

Continue Reading Updates to Human Capital Disclosure Requirements

On June 22, the Securities and Exchange Commission (SEC) released the latest edition of its Reg Flex Agenda, which is essentially the rulemaking calendar for the next year or so.  Perhaps the most surprising takeaway is the climate rule is scheduled to be adopted as early as October 2022.  While the schedules may likely shift during the internal rule drafting process, the agenda is helpful as it provides a sense of the SEC’s priorities and pipeline.

Continue Reading SEC Announces Spring 2022 Rulemaking Agenda

In March 2021, the Securities and Exchange Commission’s (SEC) then-acting chair, Allison Herren Lee, announced the creation of an Environmental, Social and Governance (ESG) Task Force within the SEC’s Division of Enforcement. Sanjay Wadhwa, the deputy director of the SEC’s Enforcement Division heads the ESG Task Force. The initial focus of this task force was to “identify any material gaps or misstatements in issuers’ disclosure of climate risks under existing [SEC] rules.”  Before yesterday, the ESG Task Force had not yet made a publicly announced climate-related enforcement action initiated by it.

Continue Reading It Happened! ESG Task Force’s First Enforcement Action

After months of anticipation, on March 21, the U.S. Securities and Exchange Commission (SEC) voted 3:1 to propose climate change-related disclosure rules that would implement prescriptive climate-related disclosure requirements (which would be applicable for most public companies) in a wide array of climate-related areas, including with respect to governance, outlook, risk management, GHG emissions, climate-related targets and goals and financial statement disclosures. These proposed rules, which are intended to provide investors with consistent, comparable, and reliable climate-related information, would represent a major shift in the public company disclosure landscape and will require significant advance effort by public companies to facilitate compliance.

Join Bass, Berry & Sims and leading environmental, social and governance (ESG) thought leaders for the next installment in our ESG Impact Webinar series on Tuesday, May 24, 2022. Our panelists will share their experience and perspectives on what in-house counsel should consider as it relates to these proposed climate change disclosure rules. Discussion topics will include:

  • Overview of the Proposed Rules.
  • Required Disclosure under Regulation S-X.
  • Required Disclosure under Regulation S-K.
  • Phase-In Periods.
  • Practical Takeaways and Next Steps.

Continue Reading [WEBINAR] What’s Next in ESG? Understanding the Proposed SEC Climate Change Disclosure Rules

Along with equal prominence, probably one of the most often non-GAAP comments we see issued by the U.S. Securities and Exchange Commission (SEC) Staff involves its objection to adjustments that it believes substitute individually tailored measurement methods for those of GAAP.  Often, the SEC Staff comments will cite to Question 100.04 of the Non-GAAP Financial Measures Compliance & Disclosure Interpretations, as follows:

Question 100.04

Question: A registrant presents a non-GAAP performance measure that is adjusted to accelerate revenue recognized ratably over time in accordance with GAAP as though it earned revenue when customers are billed. Can this measure be presented in documents filed or furnished with the Commission or provided elsewhere, such as on company websites?

Answer: No. Non-GAAP measures that substitute individually tailored revenue recognition and measurement methods for those of GAAP could violate Rule 100(b) of Regulation G. Other measures that use individually tailored recognition and measurement methods for financial statement line items other than revenue may also violate Rule 100(b) of Regulation G.   [May 17, 2016] (emphasis added)

Continue Reading SEC Staff Pushes Back on Adjusting for Normal Recurring “Public Company Expenses”

Institutional investors and proxy advisory firms continue developing and refining their policies regarding board diversity. While gender diversity on public company boards has been in focus for some time now, institutional investors and proxy advisory firms are also increasingly focusing on racial and ethnic diversity as part of their evolving approach to board diversity.

This post summarizes published board diversity policies of several institutional investors and proxy advisory firms into a singular resource for ease of reference. Below the initial breakdown is a description of specific policies concerning board diversity shareholder proposals. 

Continue Reading A Summary of Certain Proxy Advisory Firm and Institutional Investor Board Diversity Policies

After months of anticipation, on March 21, 2022, the U.S. Securities and Exchange Commission (SEC) voted 3:1 to propose climate change-related disclosure rules that would impact a company’s annual reports and registration statements.   As indicated previously by the Staff, the proposed climate-related disclosure framework is modeled partially on the Task Force on Climate-related Financial Disclosure’s (TCFD) recommendations and draws upon the Greenhouse Gas (GHG) Protocol.  (See our previous blog post discussing the Staff’s consideration of TCFD). The proposed rules, seemingly unprecedented in nature, are significantly more prescriptive rather than “principles-based” disclosure rooted in materiality, and intended to provide stakeholders with “consistent and comparable data.”

Continue Reading The SEC’s Proposed Climate Change Rules Are Out: Making Sense of 500+ Pages

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

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