This is a smart time of year to confirm plans for SEC reporting and capital markets transactions in 2020. To assist public companies in keeping track of the various filing deadlines, we have prepared a desktop reference calendar that sets forth filing deadlines for many SEC reports. To assist companies with planning capital markets transactions, including IPOs, our calendar also provides the staleness dates (i.e., the last date financial statements may be used in a prospectus or proxy statement without being updated).
SEC August 21 Open Meeting To Address Issues Related To Proxy Advisory Firms
The SEC announced that it will hold an open meeting on Wednesday, August 21, 2019 at 10:00 AM eastern time. There are two matters on the agenda, available here, which, although not specifically referring to proxy advisory firms, appear to address reliance on voting recommendations issued by such firms, and the conditions such firms must satisfy to rely on an exemption from the proxy rules.
SEC Proposes to Modernize Disclosures of Business, Legal Proceedings, and Risk Factors
On August 8, 2019, the Securities and Exchange Commission (“SEC") announced that it voted to propose amendments to Regulation S-K (available here) seeking to modernize and simplify the required disclosures by public companies, investment advisors, and investment companies (the “Proposed Amendments"). The Proposed Amendments form part of the SEC’s ongoing efforts to simplify disclosure requirements, and, with the exception of Legal Proceedings, emphasize a more flexible, principles-based approach as opposed to prescriptive requirements. “The world economy and our markets have changed dramatically in the more than 30 years since the adoption of our rules for business disclosures by public companies. Today’s proposal reflects these significant changes, as well as the reality that there will be changes in the future," said Chairman Jay Clayton. “I applaud the staff for their efforts to modernize and improve our disclosure framework, including recognizing that intangible assets, and in particular human capital, often are a significantly more important driver of value in today’s global economy. The proposals reflect a thoughtful mix of prescriptive and principles-based requirements that should result in improved disclosures and the elimination of unnecessary costs and burdens."
Technical Points to Keep in Mind When Filing Upcoming Forms 10-K, 10-Q, and 8-K
As we discussed in a prior client alert (available here), in March 2019, the Securities and Exchange Commission (the “SEC") adopted a number of changes to modernize and simplify disclosure requirements (the “Final Rules"). While many of these changes went into effect on May 2, 2019, the SEC adopted phased compliance dates for the requirements to tag data on the cover pages of Forms 10-K, 10-Q, 8-K, 20‑F, and 40-F in Inline XBRL. The Final Rules set forth the following compliance dates (which mirror the compliance dates for operating companies to implement the general Inline XBRL requirements):
Reporting Companies Are Strongly Encouraged to Review SEC Statement On LIBOR Transition
On July 12, 2019, the Division of Corporation Finance, Division of Investment Management, Division of Trading and Markets, and Office of the Chief Accountant of the Securities and Exchange Commission (the “Staff") issued a joint statement (the “Statement") (available here) regarding the expected discontinuation of LIBOR and transition to alternative reference rates. The Statement reminds readers that the discontinuation of LIBOR could have a significant impact on financial markets and may present a material risk for market participants, including public companies, investment advisers, investment companies, and broker-dealers. The Statement encourages market participants to proactively manage their transition away from LIBOR and outlines several areas that may warrant increased attention. As noted by the Staff, “[f]or many market participants, waiting until all open questions have been answered to begin this important work likely could prove to be too late to accomplish the challenging task required." We encourage anyone who may be impacted by the LIBOR transition to review the Statement, which outlines ways market participants can think through potential transition risks and provides helpful guidance on related disclosure obligations and risk management efforts.
SEC to Host Roundtable on Short-Termism on July 18
The Securities and Exchange Commission has announced (available here) that it will hold a roundtable on July 18, 2019, to hear from investors, issuers and other market participants about short-termism’s impact on capital markets and whether the reporting system or other SEC regulations should be changed to address those concerns. The event will begin at 12:30 p.m. ET in the SEC’s headquarters and be open to the public in person and via live webcast on SEC.gov, as well as archived for later viewing. The agenda and access information are available here. The roundtable is related to a request for comment that the SEC published in December 2018, when the SEC announced it may be reconsidering quarterly reporting (our post about that SEC request for comment on quarterly reporting is available here).
SEC Seeks to Simplify and Harmonize Private Offering Exemptions
On June 18, 2019, the Securities and Exchange Commission issued a concept release (available here) announcing that it isseeking comment on “possible ways to simplify, harmonize, and improve the exempt offering framework to promote capital formation and expand investment opportunities while maintaining appropriate investor protections.”
SEC To Propose Shareholder Proposal and Proxy Advisory Firm Rule Amendments
On May 22, 2019 the SEC released its Spring 2019 Regulatory Flexibility Agenda (Reg Flex Agenda), available here. The Reg Flex Agenda identifies rulemaking projects that the SEC expects to address, and classifies those projects as being either in the “Proposed & Final Rule Stages," which reflects those that the SEC expects to propose over the coming year, and “Long-Term Actions," which includes those that the SEC is more likely to address over a longer timeframe.
SEC Tweaks Revised Form 8-K and 10-Q Cover Pages
As a result of amendments adopted by the Securities and Exchange Commission (SEC) on March 20, 2019 (available here, and discussed in our client alert available here), several SEC form cover pages were changed, effective May 2, 2019, including: Form 10-K, Form 10-Q, Form 8-K, Form 20-F, and Form 40-F.
SEC Proposes to Improve Disclosures Relating to Acquisitions and Dispositions of Businesses
On May 3, 2019, the Securities and Exchange Commission announced (available here) proposed changes to existing disclosure requirements in connection with acquisitions and dispositions of businesses. The proposed rules (available here) are intended to: (1) improve financial disclosures regarding the acquisition and disposition of businesses, (2) facilitate more timely access to capital, and (3) reduce the complexity and compliance costs related to such disclosures.