On December 22, 2020, the Securities and Exchange Commission (the “SEC") proposed and published for comment amendments to Rule 144, Form 144, Form 4, Form 5 and Rule 101 of Regulation S-T. These amendments primarily seek to (a) mitigate the risk of unregistered distributions in connection with sales of market-adjustable securities under the current Rule 144 safe harbor by revising the holding period for such securities to begin upon the conversion or exchange of such securities, and (b) update and streamline Form 144 by mandating electronic filing and eliminating the Form 144 filing requirement with respect to non-reporting issuers. Comments on the proposed rules will be due 60 days after publication of the proposal in the Federal Register and may be submitted electronically using the SEC’s internet comment form (http://www.sec.gov/rules/submitcomments.htm) or by mail to the following address: Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number S7-24-20.
SEC Adopts New Rule Relating to Submissions through EDGAR and Electronic and Remote Online Notarization
On December 11, 2020, the Securities and Exchange Commission (the “SEC") announced its adoption of a new rule under Regulation S-T in connection with its administration of the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR") to promote the reliability and integrity of EDGAR submissions, and also the adoption of revisions to Volumes I and II of the EDGAR Filer Manual and related rules under Regulation S-T, including provisions regarding electronic notarizations and remote online notarizations, which include electronic signatures.
SEC (Finally) Adopts Resource Extraction Disclosure Rules (Again)
On December 16, 2020, the Securities and Exchange Commission (the “SEC") adopted final rules (available here) requiring certain disclosure by public companies that engage in the commercial development of oil, natural gas or minerals. Under the final rules, domestic or foreign “resource extraction issuers" (the definition of which is discussed below) will have to file a Form SD on an annual basis that includes information about payments related to the commercial development of oil, natural gas or minerals that are made to a foreign government or the U.S. federal government.
Summary of Select Director Education Opportunities Available
Gibson Dunn’s summary of director education opportunities has been updated as of December 2020 and is available at the links below. Boards of Directors of public companies find this a useful resource as they look for high quality education opportunities.
Summary Chart and Comparative Blackline Reflecting Recent Amendments to MD&A Requirements Now Available
On November 19, 2020, the SEC announced that it had adopted amendments to Item 301 (“Selected Financial Data"), Item 302 (“Supplementary Financial Information") and Item 303 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations") of Regulation S-K. This article provides (1) a high level summary of the amendments, effective dates and Commissioners’ views, (2) a detailed description of the amendments in tabular format, and (3) a blackline comparison of the changes to Item 302(a) and Item 303 of Reg S-K.
SEC Updates Rules Relating to Electronic Submission of Documents
On November 17, 2020, the Securities and Exchange Commission (the “SEC”) announced that it had approved amendments to Regulation S-T and the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) Filer Manual relating to the use of electronic signatures for SEC filings, including registration statements, reports on Forms 10-K, 10-Q and 8-K, and Section 16 reports. The new rules expressly provide for the use of e-signature methods (e.g., “DocuSign” and “AdobeSign”) for these filings, subject to new authentication procedures summarized below.
Desktop Calendar of SEC Deadlines for 2021 Now Available
To assist companies in planning for their SEC reporting and capital markets transactions in 2021, we have prepared a desktop reference calendar that sets forth filing deadlines for core SEC reports. Our calendar also provides SEC staleness dates (i.e., the last date financial statements may be used in a prospectus or proxy statement without being updated).
SEC Adopts Changes to the Exempt Offering Framework
In an effort to facilitate capital formation and increase opportunities for investors by expanding access to capital for small and medium-sized businesses, on November 2, 2020, the SEC announced that it had approved amendments to certain of its rules relating to exempt offerings. The amendments follow the SEC’s June 2019 concept release and the SEC’s March 2020 proposing release on the harmonization of offering exemptions and reflect the SEC’s ongoing effort to harmonize, simplify and improve its offering framework. As discussed in our prior Monitor post (available here), the SEC has been working to untangle the current regulatory regime in order to ensure that capital-raising is rational, accessible and effective.
ISS Proposes and Opens Comment on Draft 2021 Voting Policy Updates
Last week, Institutional Shareholder Services (“ISS") proposed and published for comment voting policy changes for the 2021 proxy season. These include three proposed updates that would apply to U.S. companies.
Regulation S-K Amendments to Items 101, 103, and 105 to go Effective November 9, 2020
The amendments to Items 101, 103, and 105 of Regulation S-K that were adopted by the SEC on August 26, 2020 (discussed in our previous client alert, available here) were published in the Federal Register today, October 8, 2020. As a result, the amendments will go into effect on Monday November 9, 2020 (the first business day following 30 days after publication in the Federal Register). November 9 is also the last day for calendar companies that are large accelerated filers or accelerated filers to file the Q3 10-Q.