On April 7, 2014 the SEC’s Division of Corporation Finance issued a second set of Frequently Asked Questions (“FAQs”) on its conflict minerals rules (Exchange Act Section 13(p), Rule 13p-1 and Item 1.01 of Form SD). The full set of FAQs, including the nine new FAQs and the 12 FAQs issued in May 2013, is available at http://www.sec.gov/divisions/corpfin/guidance/conflictminerals-faq.htm. For more information about the conflict minerals rules, please see our client alert available at https://www.gibsondunn.com/publications/pages/ConflictMinerals-UnderstandingFinalSECRules.aspx, and for a discussion of the first set of FAQs, please see our client alert available at https://www.gibsondunn.com/publications/pages/SEC-Issues-FAQs-On-Conflict-Minerals.aspx.
Corp Fin Issues Revised Statement on WKSI Waivers
On March 12, 2014, the SEC’s Division of Corporation Finance (Corp Fin) issued a Revised Statement on Well-Known Seasoned Issuer Waivers (the Revised Statement).
ISS To Revise QuickScore
On January 8, 2014, Institutional Shareholder Services, Inc. (“ISS”) announced that it will launch a new version of QuickScore (“QuickScore 2.0”) on February 18, 2014. QuickScore benchmarks a company’s governance risk against other companies in the Russell 3000 Index based on a number of weighted governance factors. QuickScore 2.0 will use a different method to score companies’ governance risk and will automatically reflect changes in companies’ governance structures based on publicly disclosed information.
U.S. Court of Appeals Hears Argument on SEC’s Conflict Minerals Rules
Yesterday the U.S. Court of Appeals for the D.C. Circuit heard oral argument in a suit challenging the SEC’s conflict minerals rules, which were mandated under the Dodd-Frank Act and issued by the SEC on August 22, 2012. The case came to the D.C. Circuit on appeal from a July 2013 district court decision upholding the SEC’s rules. The rules had been challenged by the National Association of Manufacturers, the U.S. Chamber of Commerce and the Business Roundtable (the “Appellants”).
SEC Proposes Rules to Implement “Regulation A-Plus” Exemption Under the JOBS Act
The Securities and Exchange Commission today proposed rules to implement a new exemption from registration for securities offerings made pursuant to Section 3(b)(2) of the Securities Act of 1933 (Securities Act), as mandated by Section 401 of the Jumpstart Our Business Startups Act (JOBS Act). This new offering exemption is commonly referred to as “Regulation A-Plus.
SEC Corp Fin Staff Issues “Bad Actor” Rule Compliance and Disclosure Interpretations
On December 4, 2013, the Staff of the SEC’s Division of Corporation Finance issued new Compliance and Disclosure Interpretations (C&DIs) providing guidance on rules recently adopted by the SEC that prohibit certain felons and other “bad actors” from participating in private securities offerings that rely on Rule 506 of Regulation D under the Securities Act of 1933 (Securities Act). The rule generally applies to the issuer, certain third parties that participate in the offering, and certain controlling persons, officers and affiliates of the issuer and such third parties (covered persons).
NASDAQ Amends New Compensation Committee Independence Criteria to Provide Flexibility
The NASDAQ Stock Market LLC (“NASDAQ”) has amended its new rules on compensation committee independence to provide additional flexibility for committee members to meet the independence criteria. As a result of the amendment, NASDAQ rules will no longer prohibit a director from serving on a listed company’s compensation committee if the director receives fees from the company. Instead, boards must consider any fees in determining whether a director is eligible to serve on the committee. This change provides additional flexibility for companies and aligns NASDAQ’s compensation committee independence criteria with those of the New York Stock Exchange (“NYSE”).
SEC Corp Fin Staff Issues General Solicitation Interpretations Under the JOBS Act
On November 13, 2013, the Staff of the SEC’s Division of Corporation Finance issued new Compliance and Disclosure Interpretations (C&DIs) providing guidance on recent rule amendments lifting the ban on general solicitation in securities offerings made pursuant to Rule 506(c) of Regulation D under the Securities Act of 1933 (Securities Act) and Rule 144A under the Securities Act, as mandated by the Jumpstart Our Business Startups Act (JOBS Act).
ISS Opens Comment Period for 2014 Proxy Voting Policies
On October 22, 2013, Institutional Shareholder Services (“ISS”) announced two proposed changes to its 2014 U.S. proxy voting policy. ISS requested comments on the proposed changes, which can be submitted via e-mail to policy@issgovernance.com by November 4, 2013. ISS will take the comments into account when issuing its 2014 proxy voting policies. It is important to note that ISS’s final U.S. policy updates for 2014, which are expected to be released in November, may reflect additional changes beyond the two on which ISS has solicited comments.
SEC Proposes Crowdfunding Rules
Yesterday, the Securities and Exchange Commission (the “SEC”) held an open meeting to approve the release of proposed crowdfunding rules implementing Title III of the 2012 Jumpstart Our Business Startups Act (the “JOBS Act”). Once the SEC adopts final implementing rules, the crowdfunding exemption contained in Section 4(a)(6) of the Securities Act of 1933 (the “Securities Act”) will allow U.S. private companies (primarily startups and small businesses) to raise up to $1 million in any 12-month period from pools of small investors without registration under the Securities Act. The fundraising will be required to be conducted through a registered intermediary—either a registered broker or an online “funding portal.” While the SEC missed the December 31, 2012 deadline to adopt implementing rules, it now appears to be moving ahead full speed with the proposed rulemaking.