SEC Publishes CD&I On Exempt Offerings; Accredited Investor Guidance – Part 1
On March 12, 2025, the SEC published twenty-four new or revised compliance and disclosure interpretations (“CD&I”) related to exempt offerings. Two of the new C&DI clarify acceptable processes for verifying accredited investor status in a Rule 506(c) offering. On the same day the SEC issued no-action relief providing further detail on affirming accredited investor status. The new guidance should make the use of Rule 506(c) offerings much easier and more palatable. This blog will address the C&DI directed to Rule 506(c) and the no-action letter, and Part 2 will unpack the rest. I’ve included a refresher on Rule 506(c) at the end of this blog.
New C&DI
Question 256.35 asks “[I]f an issuer does not satisfy any of the verification safe harbors in Rule 506(c)(2)(ii), are there other methods an issuer can use that will satisfy the requirement to take reasonable steps to verify accredited investor status?”
Answering in the affirmative, the SEC confirms that the verification methods listed in
SEC Publishes More New C&DI On Cybersecurity Rules
On June 24, 2024 the SEC published five (5) new compliance and disclosure interpretations (C&DI) on cybersecurity incident disclosures supplementing the C&DI published in December 2023 (see HERE).
Cybersecurity
In July, 2023 the SEC adopted final new rules requiring disclosures for both domestic and foreign companies related to cybersecurity incidents, risk management, strategy and governance (see HERE for a review of the new rules).
The cybersecurity rules add new Item 1.05 to Form 8-K requiring disclosure of a material cybersecurity incident including the incident’s nature, scope, timing, and material impact or reasonably likely impact on the company. An Item 1.05 Form 8-K is due within four business days following determination that a cybersecurity incident is material. Given the sensitive nature of cybersecurity crimes, the SEC has added a provision allowing an 8-K to be delayed if it is informed by the United States Attorney General, in writing, that immediate disclosure would pose a substantial risk to national security or
SEC Provides Guidance On Sell To Cover Exception In Rule 10b5-1
On December 14, 2022, the SEC adopted amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 (“Exchange Act”) to enhance disclosure requirements and investor protections against insider trading. The amendments include updates to Rule 10b5-1(c)(1), which provides an affirmative defense to insider trading liability under Section 10(b) and Rule 10b-5. For a review of the Rules see HERE and HERE.
Updated Rule 10b5-1 adds conditions to the affirmative defense to insider trading. The Rule now has cooling-off periods before trading can commence under a Rule 10b5-1 plan and adds a condition that all persons entering into a Rule 10b5-1 plan must act in good faith with respect to the plan. The Rule also requires directors and officers to include representations in their plans certifying at the time of the adoption of a new or modified Rule 10b5-1 plan that: (i) they are not aware of any material nonpublic information about the issuer or its securities; and
SEC Publishes New C&DI On Filing Fee Table And Inline XBRL
Back in fourth quarter 2023, the SEC published several new compliance and disclosure interpretations on various topics including cyber incident disclosure, proxy and information statements, the inclusion of securities in the filing fee exhibit, and Inline XBRL. This blog is the last in a series of three covering the plethora of new C&DI.
Related to the filing fee table:
Question 239.02 and 240.17 – A well-known seasoned issuer registers securities on an automatic shelf registration statement and elects to defer payment of filing fees pursuant to Rule 456(b). The issuer subsequently files a prospectus supplement in connection with a pay-as-you-go deferred fee payment under Rules 456(b) and 457(r) that includes the required filing fee exhibit. Must the filing fee exhibit’s Table 1 list all the securities listed in the initial filing of the related registration statement or is Table 1 permitted to list only the securities being offered by the prospectus supplement as to which the fees are
SEC Publishes New C&DI On Proxy Rules
Back in fourth quarter 2023, the SEC published several new compliance and disclosure interpretations on various topics including cyber incident disclosure, proxy and information statements, the inclusion of securities in the filing fee exhibit, and Inline XBRL. As my blog topic list tends to be very long, I am finally getting to this and will cover the various new C&DI topics over the next few weeks.
Proxy Rules
The federal proxy rules can be found in Section 14 of the Securities Exchange Act of 1934 (“Exchange Act”) and the rules promulgated thereunder. The rules apply to any company which has securities registered under Section 12 of the Act. Section 14 of the Exchange Act and its rules govern the timing and content of information provided to shareholders in connection with annual and special meetings with a goal of providing shareholders meaningful information to make informed decisions, and a valuable method to allow them to participate in the shareholder voting
SEC Publishes New C&DI On Cybersecurity Rules
Back in fourth quarter 2023, the SEC published several new compliance and disclosure interpretations on various topics including cyber incident disclosure, proxy and information statements, the inclusion of securities in the filing fee exhibit, and Inline XBRL. As my blog topic list tends to be very long, I am finally getting to this and will cover the various new C&DI topics over the next few weeks.
Cybersecurity
In July, 2023 the SEC adopted final new rules requiring disclosures for both domestic and foreign companies related to cybersecurity incidents, risk management, strategy and governance (see HERE for a review of the new rules). The SEC has published three new C&DI directly related to the Form 8-K reporting requirements and ability to delay reports based on national security concerns.
The cybersecurity rules add new Item 1.05 to Form 8-K requiring disclosure of a material cybersecurity incident including the incident’s nature, scope, timing, and material impact or reasonably likely impact on the
SEC Publishes New C&DI On Pay Versus Performance Rules
For the second time since the adoption of the pay versus performance rules (Pay vs. Performance) in August, 2022 (see HERE), the SEC has published guidance via new compliance and disclosure interpretations (“C&DI”). The SEC previously published 15 C&DI on the subject in February 2023 – see HERE.
The Pay vs. Performance rules require companies to provide a tabular disclosure of specified executive compensation and financial performance measures for their five most recently completed fiscal years in any proxy or information statement filed under Section 14 of the Exchange Act. With respect to the measures of performance, a company is required to report its total shareholder return (TSR), the TSR of companies in the company’s peer group, its net income, and a financial performance measure chosen by the company itself. Using the information presented in the table, companies are required to describe the relationships between the executive compensation actually paid and each of the performance measures, as well
SEC Publishes New C&DI On Rule 10b5-1
On August 25, 2023, the SEC published five new Compliance and Disclosure Interpretations (C&DI) on the recently effective Rule 10b5-1 amendments. The new rules were adopted on December 14, 2022 (see HERE) to enhance disclosure requirements and investor protections against insider trading. The amendments include updates to Rule 10b5-1(c)(1), which provides an affirmative defense to insider trading liability under Section 10(b) and Rule 10b-5. This is the second time the SEC has published guidance on the rules having issued three C&DI in May – see HERE.
The rule amendments updated the conditions to satisfy the 10b5-1 affirmative defense, including adding cooling-off periods before trading can commence under a Rule 10b5-1 plan and a condition that all persons entering into a Rule 10b5-1 plan must act in good faith with respect to the plan. The amendments also require directors and officers to include representations in their plans certifying at the time of the adoption of
Regulation FD
In addition to the rules and regulations governing the numerous mandatory disclosure obligations under the federal securities laws, the SEC also has several rules governing a company’s obligations vis-a-vis voluntary disclosures. I have written several times about the use of non-GAAP financial measures (see HERE and the imbedded links therein), but it has been several years (10!) since I wrote about the rules and regulations that form a part of Regulation Fair Disclosure (“Regulation FD”).
Regulation FD, comprised of Exchange Act Rules 100-103, was first adopted in the year 2000 in response to concerns about selective disclosure to certain market participants, including a practice of having private calls with analysts, institutional shareholders and traders. Regulation FD requires a company to make public disclosure in advance of an intentional disclosure of material non-public information or immediately following an inadvertent disclosure of such material information.
Regulation FD Rules
Exchange Act Rule 100 mandates that whenever a company or any person acting
SEC Publishes Guidance On Rule 10b5-1 Amendments
On May 25, 2023, the SEC published three new Compliance and Disclosure Interpretations (C&DI) on the recently effective Rule 10b5-1 amendments. The new rules were adopted on December 14, 2022 (see HERE) to enhance disclosure requirements and investor protections against insider trading. The amendments include updates to Rule 10b5-1(c)(1), which provides an affirmative defense to insider trading liability under Section 10(b) and Rule 10b-5.
The changes updated the conditions that must be met for the 10b5-1 affirmative defense, including adding cooling-off periods before trading can commence under a Rule 10b5-1 plan and a condition that all persons entering into a Rule 10b5-1 plan must act in good faith with respect to the plan. The amendments also require directors and officers to include representations in their plans certifying at the time of the adoption of a new or modified Rule 10b5-1 plan that: (i) they are not aware of any material nonpublic information about the issuer
