KMK Law Corporate & Securities Blog

On May 9, 2019, the SEC voted to propose amendments to the definitions of accelerated filer and larger accelerated filer. The cost-reducing effects of the proposed amendments are discussed below. 

The amendments would exclude from the accelerated and large accelerated filer definitions certain issuers who are eligible to be smaller reporting companies and had no revenues or annual revenues of less than $100 million in the most recent fiscal year for which audited financial statements are available.  Additionally, for accelerated and large accelerated filers becoming ...

On May 3, 2019 the SEC proposed amendments to Regulation S-X to simplify financial disclosure requirements for public companies relating to acquisitions and dispositions of businesses.  Among other changes, the amendments would modify the significance tests applicable to acquisitions as set forth in Rule 3-05 of Regulation S-X, which sets forth the number of years of financial statements of the acquired business that must be filed with the SEC. Specifically, the proposal would amend (i) the investment test to require a comparison of a company’s investment in an acquired ...

On April 2, 2019, the SEC adopted new rules allowing for the filing of redacted material contracts without the need to apply for confidential treatment.  The rules, included in Item 601(b) of Regulation S-K, provide that information contained in material contracts may be redacted, provided the redacted information (i) is not material and (ii) would be competitively harmful if publicly disclosed.  In order to properly redact such information, companies must comply with specific requirements, including marking the exhibit index of the filing to indicate that portions of a contract ...

On July 17, 2018, the U.S. House of Representatives passed the “JOBS and Investor Confidence Act of 2018.” This bill is the third piece of the “Jumpstart Our Business Startups (JOBS) Act” legislation, and its aim is to reform capital markets to assist small businesses and entrepreneurs in accessing capital. The bill is set to be voted on by the Senate during the fall and will become effective 90 days after it is signed by the President.

Several companies have asked us about the status of registrations and qualifications of security token offerings (STOs) / initial coin offerings (ICOs) with the Securities and Exchange Commission. There is not much to report.

On March 7, 2018, the Securities and Exchange Commission (SEC) issued a public statement regarding the risk posed by online platforms that allow trading in digital assets to violate federal securities laws. This statement indicates that the SEC is increasing its focus on platforms that offer such trading and their compliance with applicable securities laws.

Beginning on July 10, 2017, the Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance will accept nonpublic draft registration statements from all issuers relating to IPOs and initial registrations under Section 12(b) of the Securities Exchange Act of 1934 (“Exchange Act”).

The U.S. Securities and Exchange Commission (“SEC”) has adopted new rules making it easier for investors to find exhibits to an issuer’s public filings. Currently, issuers submit electronic filings to the SEC using the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”), which include exhibits that are incorporated by reference to earlier filings. Investors are therefore required to search through earlier filings in order to find these exhibits, such as material contracts, articles of incorporation, and other material documents.

Protecting and encouraging whistleblowers has been a priority for the U.S. Securities and Exchange Commission (“SEC”) and its enforcement division. The SEC recently announced enforcement actions against two companies for their use of restrictive language in severance agreements that required departing employees to waive their rights to any monetary recovery under Rule 21F-17 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The rule, promulgated under the Dodd-Frank Act, is part of the SEC’s whistleblower program and is intended to prohibit employers from interfering with an employee’s right to report potential securities law violations to the SEC.

Many calendar year-end companies are beginning to prepare for annual meetings and related proxy soliciting activities. As part of that preparation, companies are turning to recent SEC rules, regulations, and policy updates. This advisory provides some reminders and updates for companies as they prepare for the 2017 proxy season.