Securities Regulation and Corporate Governance Monitor

Direct Listing Update: Revised Proposal for Primary Offerings

February 28, 2020 | Posted by Hillary H. Holmes Topic(s): Corporate Governance; Miscellaneous; Securities Regulation

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 Announces Proposed Amendments to MD&A and Guidance on Key Performance Indicators and Metrics; Commissioners Debate Addition of Sustainability Disclosure Requirements

February 7, 2020 | Posted by Hillary H. Holmes; James J. Moloney; Peter Wardle Topic(s): Audit Committee; Corporate Governance; Securities Regulation

On January 30, 2020, the Securities and Exchange Commission (the SEC) issued proposed amendments to simplify the requirements of Regulation S-K and an interpretative release relating to Management’s Discussion and Analysis (“MD&A”).

Considerations for Preparing Your 2019 10-K

January 13, 2020 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Audit Committee; Corporate Governance

In a client alert published today (available here), we offer our observations on new developments and recommended practices to consider in preparing the Annual Report on Form 10-K. In particular, given the U.S. Securities and Exchange Commission’s latest enforcement actions and recent adoption of amendments impacting disclosures in Form 10-K, there are a number of important substantive and technical considerations that registrants should keep in mind when preparing their 2019 Forms 10-K.

SEC Releases Statement on Key Reminders for Audit Committees

January 6, 2020 | Posted by Michael Scanlon Topic(s): Audit Committee; Corporate Governance; Securities Regulation

On December 30, 2019, the Securities and Exchange Commission (the “SEC”) released a statement (the “Statement”) from Chairman Jay Clayton, Chief Accountant Sagar Teotia and the Director of the Division of Corporation Finance, William Hinman, addressing the role of the audit committee in financial reporting and highlighting key reminders regarding oversight responsibilities (available here). The Statement is intended to “assist audit committees [in] carrying out their year-end work, including promoting efficient and constructive dialogue among audit committees, management and independent auditors.”

SEC Proposes Revised Resource Extraction Rules, Again!

December 28, 2019 | Posted by Hillary H. Holmes; James J. Moloney Topic(s): Audit Committee; Miscellaneous; Securities Regulation

[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

December 13, 2019 | Posted by Hillary H. Holmes Topic(s): Corporate Governance; Miscellaneous; Securities Regulation

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

December 11, 2019 | Posted by J. Alan Bannister; Hillary H. Holmes Topic(s): Corporate Governance; Miscellaneous; Securities Regulation

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.

A Current Guide to Direct Listings

December 4, 2019 | Posted by J. Alan Bannister; Hillary H. Holmes Topic(s): Corporate Governance; Miscellaneous; Securities Regulation

Direct listings have increasingly been gaining attention as a means for a private company to go public. In our most recent memo available here, we provide a summary of the current requirements for direct listings on the NYSE and Nasdaq and of NYSE’s recent proposal to amend its direct listing rules to allow primary offerings through the NYSE in conjunction with direct listings. We also explore the potential benefits and risks associated with direct listings.

Division of Corporation Finance Unveils Further Details on Its Process for Responding to Shareholder Proposal No-Action Requests

November 24, 2019 | Posted by Ronald O. Mueller; Lori Zyskowski; Elizabeth A. Ising Topic(s): Corporate Governance; Proxy Statements and Annual Meetings; Shareholder Proposals

On November 21, 2019, the Division of Corporation Finance (the “Division" or “Staff") of the Securities and Exchange Commission (“SEC") provided additional detail on how it will process responses to shareholder proposal no-action requests under Rule 14a-8. As discussed in our prior posts, available here and here, in September 2019 the Division announced that, starting with the 2019-2020 shareholder proposal season, it may respond orally instead of in writing to some no-action requests, and in some cases its response may indicate that it is declining to state a view on whether a proposal satisfies the requirements of Rule 14a-8 or is properly excludable.

Developments Regarding Changes to SEC Staff’s Shareholder Proposal No-Action Responses

October 11, 2019 | Posted by Elizabeth A. Ising; Ronald O. Mueller Topic(s): Shareholder Proposals

Several noteworthy developments have occurred following the September 6, 2019 announcement by the Division of Corporation Finance (the “Staff") of the Securities and Exchange Commission (“SEC") regarding two significant procedural changes for responding to Exchange Act Rule 14a-8 no-action requests that will be applicable to no-action requests regarding shareholder proposals submitted for annual meeting to be held in 2020. That announcement indicated that the Staff may now respond orally instead of in writing to shareholder proposal no-action requests and that the Staff may now more frequently respond by declining to state a view on whether or not it concurs that a company may properly exclude a shareholder proposal under Rule 14a-8.