On April 6, 2020, the Securities and Exchange Commission (“SEC") announced (available here) that it has immediately approved the New York Stock Exchange’s (“NYSE") proposed rule changes that temporarily waive certain shareholder approval requirements relating to private investments in public equity (PIPEs). The rule changes were proposed in light of the unprecedented disruption caused by COVID-19 and will apply through June 30, 2020. While these temporary waivers to Section 312.03 of the NYSE Listed Company Manual (the “Listing Manual") (available here) provide companies added flexibility in conducting PIPEs more quickly, companies must still obtain shareholder approval if required under any other applicable rule, including the equity compensation requirements of Section 303A.08 or the change of control requirements of Section 312.03(d) of the Listing Manual. For more information, please see our recent client alert (available here) discussing key considerations for PIPE transactions.
Miscellaneous
Disclosure Considerations: One Month Into the U.S. Outbreak
The COVID‐19 outbreak is creating a great deal of uncertainty in the global economy and in our daily lives. Companies worldwide are facing unique legal and operational challenges related to the outbreak and the downturn in the economy. In the midst of this constantly evolving landscape, U.S. publicly traded companies must continue to consider how the situation impacts their disclosure.
SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies Affected By COVID-19 For Reports due on or before July 1, 2020 4/1/2020
On March 25, 2020, the Securities and Exchange Commission (the “Commission") announced (available here) that it is providing a 45-day extension for companies to file certain disclosure reports that would otherwise have been due on or before July 1, 2020 (Order available here). This is an extension of the conditional reporting relief covered by the Commission’s relief (Original Order available here) for certain public company filing obligations under the federal securities laws, issued on March 4, 2020 (as previously discussed in our post here, and updated here), to companies impacted by the novel coronavirus disease 2019 (“COVID-19"). In addition, the Commission’s Division of Corporation Finance (the “Division") issued on March 25, 2020 its current views regarding disclosure considerations and other securities law matters related to COVID-19 (available here).
SEC Amends Accelerated and Large Accelerated Filer Definitions to Reduce Burdens on Smaller Reporting Companies – Effective April 27, 2020
On March 12, 2020, the Securities and Exchange Commission announced (available here) the adoption of a final rule (available here) amending the “accelerated filer” and “large accelerated filer” definitions. The amendments will be effective April 27, 2020 and first impact annual reports on Form 10-K due after the effective date.
Coronavirus Disease 2019 Update: Impact under Nasdaq Rules of SEC Relief to Affected Companies
On March 8, 2020, we discussed on a post (available here) about the announcement (available here) by the Securities and Exchange Commission (the “Commission”) that providedconditional regulatory relief (Order available here) for certain filing obligations under the federal securities laws to companies impacted by the coronavirus disease 2019 (“COVID-19”).
SEC Provides Conditional Regulatory Relief and Additional Disclosure Guidance for Companies Affected by the Coronavirus Disease 2019 (COVID-19)
On March 4, 2020, the Securities and Exchange Commission (the “Commission”) announced (available here) that it is providing conditional regulatory relief (Order available here) for certain filing obligations under the federal securities laws to companies impacted by the coronavirus disease 2019 (“COVID-19”), including “U.S. companies located in the affected areas, as well as companies with operations in those regions.
Direct Listing Update: Revised Proposal for Primary Offerings
On December 3, 2019, Gibson Dunn published A Current Guide to Direct Listings discussing, among other things, a proposal submitted to the U.S. Securities and Exchange Commission (SEC) by the New York Stock Exchange (NYSE)that would permit a privately-held company to conduct a direct listing in connection with a primary offering. On December 11, 2019, the NYSE withdrew its proposal (as reported in An Interim Update on Direct Listing Rules) and was expected to submit a revised proposal consistent with past proposals related to direct listings. On December 11, 2019, the NYSE submittedthe revised proposal.
SEC Proposes Revised Resource Extraction Rules, Again!
[Updated January 18, 2020]
On December 18, 2019, the Securities and Exchange Commission (the “SEC”) released proposed rules (available here) relating to the disclosure of payments by resource extraction issuers. The SEC’s release sets forth the tortured more-than-seven-year history of this rulemaking (see previous Gibson Dunn posts regarding this topic in 2015, 2013 and 2010). The SEC is proposing these rules by mandate pursuant to Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) after having earlier adopted versions of the rules vacated in 2012 by the U.S. District Court for the District of Columbia, a ruling which the SEC declined to appeal, and disapproved in 2016 by Congress pursuant to its authority under the Congressional Review Act. While Congress disapproved of the adopted rules in 2016, it did not repeal Section 1504 of the Dodd-Frank Act, so the SEC’s rulemaking mandate remained in place. Revised rules cannot be substantially similar to the ones disapproved by Congress under the Congressional Review Act. As such, the newly proposed rules substantially differ from the previously adopted rules, and the differences are discussed in more detail below.
Direct Listing Update: Revised Proposal for Primary Offerings
On December 3, 2019, Gibson Dunn published A Current Guide to Direct Listings discussing, among other things, a proposal submitted to the U.S. Securities and Exchange Commission (SEC) by the New York Stock Exchange (NYSE)that would permit a privately-held company to conduct a direct listing in connection with a primary offering. On December 6, 2019, the NYSE withdrew its proposal (as reported in An Interim Update on Direct Listing Rules) and was expected to submit a revised proposal consistent with past proposals related to direct listings. On December 12, 2019, the NYSE submitted the revised proposal.
An Interim Update on Direct Listing Rules
On December 3, 2019, Gibson Dunn published A Current Guide to Direct Listings discussing, among other things, a proposal submitted to the U.S. Securities and Exchange Commission (SEC) on November 26, 2019 by the New York Stock Exchange (NYSE) that would permit a privately held company to conduct a direct listing in connection with a primary offering, potentially creating a new on-ramp to the public capital markets in the United States.