SEC proposes rule changes intended to streamline disclosures of business operations, risk factors and legal proceedings

The SEC recently proposed revisions to Regulation S-K to streamline public companies’ disclosures of their business operations, risk factors and legal proceedings.  The proposed revisions affect Items 101(a) and (c), 103 and 105 of Regulation S-K.

Among other changes, the proposed rules would revise the requirements related to the general business description by adopting:

  • a more principles-based approach that will require each company to address matters material to its business,…
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SEC proposes amendments to “accelerated filer” and “large accelerated filer” definitions

Yesterday, the SEC announced that it is proposing amendments to the “accelerated filer” and “large accelerated filer” definitions to “reduce costs without harming investors for certain smaller public companies and, importantly, encourage more companies to enter our public markets.”

Last summer, the SEC adopted amendments to expand the number of smaller reporting companies that qualify for scaled disclosure.  Among the adopted amendments was an increase in the public float threshold for smaller reporting companies from $75 million to $250 million. … More

DOJ Criminal Division Publishes Guidance on Evaluating Corporate Compliance Programs

Last week, the U.S. Department of Justice (DOJ) Criminal Division released revised guidance on the “Evaluation of Corporate Compliance Programs.”  This latest guidance is important not only to help benchmark existing compliance programs but also to understand what DOJ will look for when making critical decisions affecting a company under investigation.  DOJ’s Fraud Section had released a prior version of this guidance in February 2017.  The 2019 guidance is notable in several respects,… More

SEC Announces Meeting to Consider Amendments to “Accelerated Filer” and “Large Accelerated Filer” Definitions

SEC announced amendmentsYesterday, the SEC announced that it would hold a public meeting on Thursday, May 9, 2019 to consider whether to propose amendments to the “accelerated filer” and “large accelerated filer” definitions to promote capital formation for smaller reporting companies.

Last summer, the SEC adopted amendments to expand the number of smaller reporting companies that qualify for scaled disclosure.  Among the adopted amendments was an increase in the public float threshold for smaller reporting companies from $75 million to $250 million. … More

UPDATE: SEC Adopts Streamlined Process for CTR Extensions

Just hours after our recent blog post regarding the need to use the traditional process for CTR extensions, the SEC announced the adoption of a new streamlined process for CTR extensions.

This streamlined process requires the submission of a one-page application by which a company can affirm that the most recently considered CTR application continues to be true, complete and accurate regarding the information for which the company continues to seek confidential treatment.  … More

Trap for the unwary: you still need to renew confidential treatment requests filed under the old rules

A confidential treatment order for information redacted from an exhibit is about to expire. Under SEC rules that took effect last week (see our prior blog posts here  and here), public companies can now redact the same type of information without prior SEC review, so the company doesn’t have to do anything, right?

Wrong.  The SEC has confirmed that its new rules for the redaction of confidential information from certain exhibits do not automatically extend orders for confidential treatment granted under the traditional application process.… More

SEC staff issues additional guidance on exhibit redactions

The SEC staff has issued supplemental guidance regarding its new rules for the redaction of confidential information from certain exhibits, which take effect today. See our blog post here for more detail on the new rules.

Consistent with prior practice, a company redacting information from a material contract must:

  • note in the exhibit list that portions of the exhibit have been omitted;…
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SEC continues its disclosure simplification initiative

On March 20, 2019, the SEC amended its disclosure requirements to ease reporting burdens for most public companies. While no individual change is particularly noteworthy, the aggregate impact of the changes should generally simplify the reporting process. A few changes will require modest additional disclosures. The most significant changes are:

  • Confidential treatment requests – Very helpfully, the SEC is dispensing with the need to obtain the staff’s prior approval of a confidential treatment request before redacting information from certain exhibits when the information is not material and its disclosure would likely cause competitive harm.…
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Possible expansion of “Testing the Waters” for Securities Offerings

In apparent recognition of the popularity of “testing the waters” by Emerging Growth Companies (EGCs) before proceeding with an IPO, the Securities and Exchange Commission recently voted to propose an expansion of this accommodation to all companies.[1]  Currently, EGCs and any person authorized to act on behalf of an EGC may engage in oral or written communications with potential investors that are qualified institutional buyers or institutional accredited investors to determine whether these investors might have an interest in a contemplated securities offering without violating the SEC’s prohibition on gun-jumping.… More

Protect your Rule 10b5-1 plans from attack: best practices

Some regulators and investors are expressing concerns about abuse of Rule 10b5-1 plans.  Last July, Representative Maxine Waters introduced the “Promoting Transparency Standards for Corporate Insiders Act,” which would require the SEC to study whether Rule 10b5-1 should be amended to restricted multiple plans, require a waiting period before making trades under a plan, and limit how often plans can be modified or canceled.  In December,… More