KMK Law Corporate & Securities Blog

On March 25, 2020, the SEC extended its March 4 Order granting exemptions to reporting and proxy delivery requirements for public companies. The SEC’s Division of Corporation Finance also issued Disclosure Guidance Topic No. 9 – Coronavirus (COVID-19).

On the afternoon of Friday, March 13, 2020, the SEC published guidance to assist public companies, investment companies, shareholders, and other market participants affected by COVID-19 with upcoming annual shareholder meetings.

As the disease known as COVID-19 (the “Coronavirus”) continues to increase its impact on commerce, human health and capital markets, all public companies should assess the impact of the Coronavirus on their SEC filings and shareholder engagement.

It is important for companies to take into consideration the following when preparing annual reports and proxy statements in 2020.

On December 18, 2019, the SEC announced it voted to propose amendments to the definition of “accredited investor” to add new categories of individuals and entities.

On December 19, 2019, the SEC issued guidance regarding the process for applying for confidential treatment of information filed with the SEC. The guidance offers an alternative to the SEC’s rules issued in April 2019 under Regulation S-K Item 601(b) permitting companies to file redacted material contracts without applying for confidential treatment of the redacted information provided the redacted information (i) is not material and (ii) would be competitively harmful if publicly disclosed.

On December 19, 2019, the SEC issued guidance regarding considerations companies should take into account with respect to disclosing risks related to intellectual property and technology associated with international operations.

On December 11, 2019, in response to the SEC’s rejection of its initial primary direct listing proposal, the NYSE filed a revised rule change proposal that would allow issuers to sell newly issued primary shares in a direct listing. A direct listing refers to the listing of a privately held company’s stock for trading on a national stock exchange without conducting an underwritten offering, spin-off or transfer quotation from another regulated stock exchange. The proposal would delay, until 90 trading days after the direct listing, the requirement that an issuer have 400 round lot holders at the time of listing.

As we explained in our September 2019 Snapshot, on August 21, 2019, the SEC issued new guidance regarding the role of proxy advisors in the proxy voting process. We expect this guidance to play an important role in the upcoming 2020 proxy season, as the SEC further defines the voting obligations of registered investment advisors and seeks to promote greater accountability on the part of the proxy advisory firms. Read more here.

On November 5, 2019, the SEC proposed amendments to certain procedural requirements and resubmission thresholds under the shareholder proposal rule of Rule 14a-8.