SEC Advisory Committee Seeks Changes to Ease Disclosure Requirements and Access to Capital for Small and Emerging Companies
The SEC’s Advisory Committee on Small and Emerging Companies met on September 23, 2015. The Committee made several recommendations, including revising the definition of “smaller reporting company” to include companies with a public float up to $250 million and affording additional disclosure accommodations to such companies.
This summer, the Dodd-Frank Act reached its five-year anniversary. The Act mandated a long list and wide range of SEC rulemaking to address issues that triggered the 2008 financial crisis.
When most directors hear the words “fiduciary duty,” a number of obvious areas come to mind: accounting practices, executive compensation and stock trading, to name a few. Now it is time to add one more to the list: cybersecurity.
The SEC recently provided guidance on how delinquent filers can come back into compliance without filing all of their missed Exchange Act reports. The process involves a catch-up filing of a Form 10-K for the most recently completed fiscal year with “all material information that would have been included in those filings.”
The SEC staff recently issued new interpretive guidance on the general solicitation prohibition for exempt offerings under Regulation D. The guidance suggests some additional flexibility in the types of communications and activities permitted.
According to Fortune, “A sea change is under way in the governance of America’s public companies.” To be prepared for a potential battle, boards should understand the activist environment and industry dynamics and assess their company’s defense strategies.
Not surprisingly, the effectiveness of a company’s ethics and compliance programs depends on leadership.
A recent Delaware Supreme Court ruling suggests that companies should review their advance notice bylaw provisions and assess whether they are in line with best practices. In Hill International, Inc. v. Opportunity Partners L.P., the company’s disclosure in the prior year’s proxy statement that the next annual meeting would be held “on or about” a given date did not trigger its advance notice bylaw provision.
On August 5, 2015, the SEC approved a rule to implement the Dodd-Frank Act mandate that public companies disclose the ratio of median pay of all employees to the principal executive officer (typically the CEO) total compensation.
In the last few years, the SEC has been pursuing most of its enforcement actions through administrative proceedings, rather than filing charges in federal district court. The U.S. Chamber of Commerce recently criticized the practice and called for reform.