A looming partial shutdown of the federal government is on track to occur at 12:01 a.m. ET on Sunday, October 1, 2023, if Congress is unable to reach agreement on legislation funding the government. The SEC Division of Corporation Finance (the “Division”) announced that in the event of a government shutdown, the SEC’s “activities will be extremely limited” and specifically, that it would not be able to accelerate the effectiveness of registration statements. The Division advised that, to the extent possible, registrants with pending registration or offering statements that have satisfied the requirements to request acceleration of the effective date should consider requesting effectiveness or qualification while the Division continues its normal operations.
Capital Markets
New Vote Reporting Disclosures Required on Form N-PX – Vote Reports Now Extend to All 13F Filers – No Longer Limited to Registered Funds
In November 2022, the Securities and Exchange Commission (“SEC”) adopted amended rules that update the existing reporting requirements on Form N‑PX and create new Form N‑PX reporting requirements for institutional investment managers.[1] The purpose of these amendments is to increase transparency surrounding proxy voting records. Prior to the adoption of this new rule, registered investment management companies (“Funds”), such as mutual funds and exchange traded funds, were required to publicly report their annual proxy voting records on Form N‑PX.
Supreme Court Upholds Tracing Requirement For Section 11 Claims in Direct Listings – Slack Technologies LLC v. Pirani, No. 21-200
On June 1, 2023, the Supreme Court of the United States unanimously upheld that plaintiffs alleging the registration statement for a “direct listing" IPO contained a material misstatement or omission, who sue under Section 11 of the Securities Act of 1933, must trace the shares they bought to the registration statement. In a direct listing, unlike a traditional IPO, unregistered shares can be sold by non-affiliates on the initial listing date, so it is possible that certain shares bought on the first day will be unregistered shares and thus not subject to the strict liability standard of Section 11.
SEC Adopts New Final Rules for Clearance and Settlement; Proposes Changes for Investment Adviser Rules
On February 15, 2023, the Securities and Exchange Commission (the “SEC") adopted final rule changes intended to reduce risk in clearance and settlement for most broker-dealer securities transactions and proposed new rules designed to enhance safeguards for customer assets managed by investment advisers.
EDGAR Ready to Accept Online Form 144 Filings Ahead of Deadline for Electronic Filing Requirement
Since September 23, 2022, the Securities and Exchange Commission (the “SEC") Electronic Data Gathering, Analysis, and Retrieval (“EDGAR") system has been ready to accept electronic Form 144 filings, pursuant to the SEC’s recent amendments requiring certain Forms 144 to be filed electronically. Filers have approximately six months from September 2022 to transition to electronic filing of Forms 144. The SEC’s compliance date is April 13, 2023.
SEC Raises Annual Gross Revenue Amount in the Definition of Emerging Growth Company
On September 9, 2022, the Securities and Exchange Commission (the “SEC”) amended its rules to
implement inflation-adjusted amendments to Rule 405 of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 12b-2 of the Securities Exchange Act of 1932, as amended (the “Exchange Act”), and raised the annual gross revenue amount in the definition of “emerging growth company” (“EGC”) from $1,070,000,000 to $1,235,000,000. The final rule (available
Update on Changes in SEC Commissioners
On July 18, 2022, the Securities and Exchange Commission (“SEC”) announced that Jaime Lizárraga was sworn in as the SEC’s newest Commissioner following the departure of Allison Herren Lee on July 15. The current SEC Commissioners are as follows, in order of reverse seniority:
Now Available: SEC Desktop Calendar for 2023
To continue assisting US companies with planning for SEC reporting and capital markets transactions into 2023, we offer our annual SEC Desktop Calendar. This calendar provides both the filing deadlines for key SEC reports and the dates on which financial statements in prospectuses and proxy statements must be updated before use (a/k/a financial staleness deadlines).
SEC Proposes Rule Changes to Shorten the Security Settlement Cycle to T+1 by March 31, 2024
On February 9, 2022, the Securities and Exchange Commission (the “Commission”) announced a proposed rule to shorten the standard settlement cycle for most broker-dealer transactions from two business days after the trade date (“T+2″) to one business day after the trade date (“T+1″), while soliciting comments regarding challenges and possible approaches to achieving settlement by the end of trade date (“T+0″).
Now Available: Considerations for Preparing Your 2021 Form 10-K
As we do each year, we offer our observations on new developments and recommended practices for calendar-year filers to consider in preparing their Form 10-K. This alert reviews the recent amendments to Regulation S-K adopted by the U.S. Securities and Exchange Commission (“SEC”) and discusses how public companies are reacting to these new requirements.