You searched for proxy - Page 3 of 66

SEC Adopts Final Rules On SPACS, Shell Companies And The Use Of Projections – Part 1

February 27, 2024

On January 24, 2024, the SEC adopted final rules enhancing disclosure obligations for SPAC IPOs and subsequent de-SPAC business combination transactions. The rules are designed to more closely align the required disclosures and legal liabilities that may be incurred in de-SPAC transactions with those in traditional IPOs. The new rules spread beyond SPACs to shell companies and blank check companies in general.

The SEC is specifically requiring enhanced disclosures with respect to compensation paid to sponsors, conflicts of interest, dilution, and the determination, if any, of the board of directors (or similar governing body) of a SPAC regarding whether a de-SPAC transaction is advisable and in the best interests of the SPAC and its shareholders. The SEC has also adopted rules that deem any business combination transaction involving a reporting shell company, including a SPAC, to involve a sale of securities to the reporting shell company’s shareholders, and has amended several financial statement requirements applicable to transactions involving

Section 13 – Beneficial Shareholder Reporting Requirements – Part II

February 20, 2024

As discussed last week, the SEC has adopted final amendments to Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (“Exchange Act”). The amendments were first proposed in February, 2022 – see HERE.

The final rules do not adopt proposed changes to determine beneficial ownership where a person holds cash settled derivative securities but rather refer to guidance on the subject. Likewise, the final rules do not adopt many changes that had been proposed to clarify the circumstances under which two or more persons have formed a “group” that would be subject to beneficial ownership reporting obligations; or to provide new exemptions to permit certain persons to communicate and consult with one

Section 13 – Beneficial Shareholder Reporting Requirements – Part 1

February 13, 2024

Barely two weeks after the SEC charged six officers, directors and five percent (5%) or greater shareholders with failing to timely file reports, the SEC adopted final amendments to Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (“Exchange Act”). The amendments were first proposed in February, 2022 – see HERE.

The amendments update Sections 13(d), 13(g) and Regulation 13D-G to accelerate filing deadlines for both initial and amended reports; expand the timeframe within a business day in which filings may be timely made; clarify the Schedule 13D disclosure requirements with respect to derivative securities; and require that Schedule 13D and 13G filings be filed using XBRL. I’ve included a chart of the amendments to Schedules 13D and 13G at the end of this blog.

The final rules do not adopt changes that had been proposed to clarify the circumstances under which two or more persons have formed a “group” that would be subject to beneficial ownership reporting

NYSE Amends Shareholder Approval Requirements In Private Securities Transactions Involving Substantial Shareholders

February 6, 2024

On December 26, 2023, the SEC approved an NYSE rule change to make it easier for listed companies to raise money from existing substantial shareholders. In particular, the NYSE has amended Section 312.03(b) and 312.04 of the NYSE Listed Company Manual to modify the circumstances under which a listed company must obtain shareholder approval prior to the sale of securities below the Minimum Price to a substantial security holder.

Background

Section 312.03 of the NYSE Listed Company Manual lists the circumstances upon which shareholder approval must be obtained prior to the issuance of securities. Pre-amendment Section 312.03(b)(i) requires shareholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions, to a director, officer or substantial security holder of the company (each a “Related Party”) if the number of shares of common stock to be issued, or if the number of shares of common stock

The Corporate Transparency Act – What You Need To Know

January 30, 2024

Since the January 1, 2024 compliance effective date for the Corporate Transparency Act, I have been inundated with compliance inquiries. Here is what you need to know.

Background

On January 1, 2021, Congress passed the Corporate Transparency Act (“CTA”). The CTA requires all business entities, subject to certain exceptions, to disclose information about the entity and the individual(s) who own such entity and/or have substantial control. The CTA was created to help the United States government combat money laundering, tax fraud and illegal foreign ownership of U.S. businesses. On September 30, 2022, the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a Final Rule on the CTA, explaining what information needs to be disclosed in the form of a Beneficial Ownership Information Report (referred to as a “BOI Report”). For a review of the rule release, see HERE. The BOI Report will become part of a national database on corporate ownership.

The CTA specifically requires entities to file

SEC Issues Staff Report On Accredited Investor Definition

January 23, 2024

On December 15, 2023, the SEC issued a staff report on the accredited investor definition. The report comes three years after the most recent amendments to the accredited investor definition (see HERE).

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) requires the SEC to review the accredited investor definition, as relates to natural persons, at least once every four years to determine whether the definition should be modified or adjusted. The last two reports can be read HERE and HERE.

The current report focuses on the composition of the accredited investor demographic, including since the last definition amendments; the extent to which accredited investors have the financial sophistication, ability to sustain the risk of loss of investment, and access to information that have traditionally been associated with an ability to fend for themselves; and accredited investor participation in exempt offerings.

I’ve included the complete current accredited investor definition at the end of this blog.

Background

All

SEC Fall 2023 Regulatory Agenda

January 16, 2024

On December 6, 2023, the SEC published its semi-annual Fall 2023 regulatory agenda (“Agenda”) and plans for rulemaking. The Agenda is published twice a year, and for several years I have blogged about each publication. Although items on the Agenda can move from one category to the next, be dropped off altogether, or new items pop up in any of the categories (including the final rule stage), the Agenda provides valuable insight into the SEC’s plans and the influence that comments can make on the rulemaking process.

The Agenda is broken down by (i) Proposed Rule Stage; (ii) Final Rule Stage; and (iii) Long-term Actions. The Proposed and Final Rule Stages are intended to be completed within the next 12 months and Long-term Actions are anything beyond that. The number of items to be completed in a 12-month time frame is 43, down from 55 on the Spring 2023 Agenda.

Fourteen items are included in the proposed rule stage, down

What Is Regulation M?

January 9, 2024

Regulation M, which was adopted in 1996, is designed to prevent market manipulation by participants in a securities offering by regulating certain activities. In general, Regulation M restricts distribution participants (underwriters, placement agents and their affiliates), issuers, selling security holders and their affiliates, from bidding for, purchasing, or attempting to induce other to bid for or purchase, certain securities during an applicable restricted period. Regulation M also prohibits any person that has sold short a security that is the subject of a registered offering from purchasing securities in the offering from an underwriter, or broker or dealer participating in the offering if the short sale took place during a specified period prior to the pricing of the registered offering.

Although a large part of Regulation M relates to underwriter and broker dealer conduct and due diligence obligations, it is helpful for issuers and selling security holders to understand the rules as pertains to them. Regulation M consists of six

The New 10-K Requirements For Annual Report Season

January 2, 2024

As 2023 has come to a close it is time to prepare for the upcoming annual report season and this year there are multiple new requirements to be cognizant of. With annual reports being followed by proxies and first quarter 10-Q’s in rapid succession, it is important to get ahead of all the new disclosures. This blog will summarize each of the new disclosures and include some practice tips.

First, though is what is suddenly not a new requirement and in particular the share repurchase disclosures. Adopted on May 3, 2023 (see HERE) the new disclosure requirements would have taken effect for inclusion in the upcoming 10-K season. Following a successful court challenge, on November 22, 2023, the SEC issued an order postponing the effective date of the new rules pending further SEC action (see HERE). However, the SEC may not get the opportunity to resurrect the rules. The U.S. Chamber of Commerce is doubling down and

NASDAQ Amends Rules For Waivers To Code Of Conduct

December 26, 2023

On September 5, 2023, Nasdaq adopted amendments to Listing Rule 5610 and IM-5610 requiring listed companies to maintain a code of conduct and to disclose certain waivers. This is also a good time to discuss the code of conduct/code of ethics requirements applicable to all companies subject to the Securities Exchange Act of 1934 (“Exchange Act”) reporting requirements.

Code of Conduct/Code of Ethics

Section 406(c) of the Sarbanes-Oxley Act of 2002 (“SOX”) requires all companies that are subject to the Exchange Act reporting requirements to disclose whether they have adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. If the company has not adopted such a code, it must explain why it has not done so.

SOX defines a code of ethics as written standards reasonably designed to deter wrongdoing and to promote: (i) honest and ethical conduct including related to conflicts of

1700 Palm Beach Lakes Blvd, Suite 820

(800) 341-2684

Contact us

MAKE VALUED ALLIANCES

Search Results for: proxy – Page 3

SEC Adopts Final Rules On SPACS, Shell Companies And The Use Of Projections – Part 1

Section 13 – Beneficial Shareholder Reporting Requirements – Part II

Section 13 – Beneficial Shareholder Reporting Requirements – Part 1

NYSE Amends Shareholder Approval Requirements In Private Securities Transactions Involving Substantial Shareholders

The Corporate Transparency Act – What You Need To Know

SEC Issues Staff Report On Accredited Investor Definition

What Is Regulation M?

The New 10-K Requirements For Annual Report Season

NASDAQ Amends Rules For Waivers To Code Of Conduct

Contact Information

Recent Posts

SEC Adopts Final Rules On SPACs, Shell Companies And The Use Of Projections – Part 9

SEC Adopts Final Rules On SPACS, Shell Companies And The Use Of Projections – Part 8

SEC Adopts Final Rules On SPACS, Shell Companies And The Use Of Projections – Part 7

SEC Adopts Final Rules On SPACS, Shell Companies And The Use Of Projections – Part 6

Legal Resources

Tweets

DEVELOPED AND MANAGED BY

Featured On

Contact Author

Have a Question for Laura Anthony?