KMK Law Corporate & Securities Blog

Pursuant to Section 1502 of the Dodd-Frank Act, the SEC promulgated new disclosure and reporting requirements concerning the use of certain conflict minerals (tantalum, tin, tungsten and gold) originating in the Democratic Republic of the Congo and certain adjoining countries (each a “Covered Country”). The new rule requires reporting companies to disclose whether conflict minerals are present in their products, whether they originated in a Covered Country, and the extent of the company’s due diligence effort with respect to the inquiries made and the measurers taken to determine the origin of the minerals and whether the products are conflict free. Reporting companies must file their annual Form SD and, depending upon the outcome of the due diligence, a Conflict Minerals Report, by the June 1, 2015 deadline. As companies prepare for the second year of filings, and in light of the pending litigation challenging the rule, many companies are looking for guidance.  

As mandated by 2012’s Jumpstart Our Business Startups Act (“JOBS Act”), the Securities and Exchange Commission has proposed amendments to the thresholds at which a company will be required to register its equity securities under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) and thus be subject to the Exchange Act’s periodic reporting obligations. Exchange Act registration would now be required only when a company has more than $10 million in assets and a class of equity securities “held of record” by either: (a) 2,000 persons (up from 500 persons), or (b) 500 persons or more who are not “accredited investors” under SEC rules (with the determination being made as of the last day of the fiscal year). The proposal would also amend the threshold requirements for banks or bank holding companies to terminate or suspend the registration of a class of securities under the Exchange Act from 300 to 1,200 persons. 

On April 14, 2014 the U.S. Court of Appeals for the D.C. Circuit struck down part of the U.S. Securities and Exchange Commission’s (“SEC”) controversial new “Conflict Minerals Rules” requiring publicly-traded companies to disclose whether their products contain certain minerals from certain central African countries. Despite this decision, until further notice public companies should continue to carry out efforts to comply with the SEC’s rules. 

In January 2013, the SEC approved the new listing standards proposed by NASDAQ for independent compensation committees and compensation consultants, legal counsel and other advisors. In November 2013, NASDAQ amended those listing standards and required companies to certify their company’s compliance with, or exemption from, these amended compensation committee listing rules. In January 2014, NASDAQ released the certification form. The certification must be provided to NASDAQ no later than 30 calendar days after the company’s first annual shareholder’s meeting occurring after January 15, 2014, or October 31, 2014, whichever is earlier. 

In January 2013, the SEC approved the new listing standards proposed by Nasdaq for independent compensation committees and compensation consultants, legal counsel and other advisors. These new listing standards, adopted as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and new SEC Rule 10C-1 under the Securities Exchange Act of 1934, are designed to promote the independence of compensation committee members, consultants and advisors. 

On Wednesday October 23, 2013, the Securities and Exchange Commission (SEC) voted unanimously to propose regulations for equity crowdfunding, which will enable unaccredited U.S. investors to invest in startups and small businesses.