KMK Law Corporate & Securities Blog

On July 12, 2019, the SEC staff published a statement seeking to encourage public companies to actively prepare for the transition away from LIBOR. Among other considerations, the SEC statement provides that such preparation should include determining current contractual exposure to LIBOR and evaluating possible alternatives to LIBOR in future contracts.  The Division of Corporation Finance also provided specific advice to public companies that they should consider disclosures relevant to investors pertaining to LIBOR’s expected discontinuation.

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On July 1, 2019, SEC rules regarding the disclosure of hedging policies or practices became effective.  New Item 407(i) of Regulation S-K requires public companies to provide, among other items:

• A summary of the company’s hedging policies or the full text of such policies;
• The categories of hedging transactions that are either specifically allowed or disallowed;
• The effect of hedging policies on all employees and directors; and
• If no hedging policy is in effect, a statement that no such policy is in effect.

The new rule applies to proxy statements for fiscal years beginning on or ...