On December 15, 2010, the Securities and Exchange Commission (the "SEC") proposed rules to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to: (1) conflict minerals; (2) mine safety matters; and (3) resource extraction issuer payments to governments. Each of the proposed rules was approved by the SEC without questions. Comments on the proposed rules must be submitted to the SEC by January 31, 2011.
Delaware Supreme Court Reverses Court of Chancery Opinion Concerning Corporations with Staggered Boards
On November 23, 2010, in Airgas, Inc. v. Air Products & Chemicals, Inc., — A.3d —-, 2010 WL 4734305 (Del. Nov. 23, 2010), the Delaware Supreme Court reversed last month’s decision of the Court of Chancery, Airgas, Inc. v. Air Products & Chemicals, Inc., No. 5817-CC, 2010 WL 3960599 (Del. Ch. Oct. 8, 2010), regarding the scheduling of Airgas’s annual meeting and its potential effect on Airgas’s staggered board. The Supreme Court’s decision invalidates an amendment to Airgas’s bylaws backed by Air Products and holds that the "Annual Meeting Term Alternative" adopted by Airgas to define the length of its directors’ terms provides for a three-year term for each director.
Protectionism and Paternalism at the UK Panel on Takeovers and Mergers
On 1 June 2010 the UK Panel on Takeovers and Mergers (Panel), issued a ‘Green’ Consultation Paper[1] on the Review of Certain Aspects of the Regulation of Takeover Bids in the UK (Green Paper). This Green Paper was issued following an announcement earlier in the year by the Panel that it would review certain rules of the UK Code on Takeovers and Mergers (Code) in the lights of widespread commentary and public discussion following the acquisition of Cadbury PLC by Kraft Foods Inc. in Q1 2010. On 21 October 2010[2], the Code Committee of the Panel issued a statement setting out its findings following this initial consultation period which involved reviewing nearly 100 responses from a broad range of commerce, industry and practice including academics, trade union representatives and the professional advisory community (Response Statement).
SEC Proposes New Dodd-Frank Whistleblower Rule
New York partner Barry Goldsmith and Washington, D.C. partners Eugene Scalia, Amy Goodman and associate Daniel H. Ahn are the authors of "SEC Proposes New Dodd-Frank Whistleblower Rule" [PDF] published in the November 2010 issue of Insights.
U.S. SEC Proposes and Seeks Comment on New Dodd-Frank Whistleblower Rule
On November 3, 2010, the U.S. Securities and Exchange Commission ("SEC") proposed a rule to implement the new whistleblower program mandated by Section 922 of the Dodd-Frank Act. The proposed rule establishes standards and procedures pursuant to which the SEC would reward whistleblowers who provide high quality tips to the agency that lead to successful SEC enforcement actions. The SEC’s press release is available here: http://sec.gov/news/press/2010/2010-213.htm. The full 181-page proposal is available at http://www.sec.gov/rules/proposed/2010/34-63237.pdf.[1]
UK Government Publishes Consultation Paper on Proposed New Regulatory Landscape
In a previous alert published in July, The UK’s Blueprint for Financial Regulation, we looked at the UK Government’s proposals for an overhaul of the UK financial regulatory infrastructure. These proposals were issued upon the initiation of the new Government, aimed at addressing a systemic failure in the UK domestic regime to recognise and respond in a timely and adequate manner to the global financial crisis.
FASB Announces Deferral of Plan to Adopt Changes to Loss Contingency Disclosure Standard
In an important development for U.S. public companies, the Financial Accounting Standards Board (the "FASB") announced at a meeting today that it is deferring plans to adopt proposed amendments to the accounting standards governing the disclosure of loss contingencies, including litigation-related contingencies. The FASB issued an exposure draft on July 20, 2010 (the "Exposure Draft") that contained its proposed modifications to the standards. With its Exposure Draft, the FASB had indicated that it planned to adopt the final standard so that it would be effective for periods ending after December 15, 2010. As a result of today’s action, however, the proposed effective date for the modifications contained in the Exposure Draft has been deferred, pending further deliberations. The FASB suggested that it will revisit the effective date and the Exposure Draft generally after the staff has completed its comment letter review and any revisions to the project plan; the FASB noted that it planned to conduct its additional deliberations before the end of 2010.
EU AIFM Directive – An Update
The curtain is slowly closing on the era of (relatively) light regulation of Alternative Investment Funds in Europe. Key developments flowing from a meeting of European Finance Ministers on 19 October to discuss the ‘AIFM Directive’ include agreement on a slightly less onerous regime for depositaries and confirmation that there will eventually be a ‘passport’ regime allowing marketing of non-EU Funds on a pan-European basis. Although progress has been made, we are nonetheless concerned that the overall effect of the Directive will be to render meaningless over time the distinction between alternative funds marketed to professional investors and the (higher cost) retail funds established under the UCITS regime.
French Banking and Financial Regulation Bill: Summary of Main Provisions
On October 11, 2010, the French Parliament adopted the French Banking and Financial Regulation Statute (loi de regulation bancaire et financière).
The 100 page long Statute contains provisions significantly amending existing laws and regulations regarding, inter alia, (i) the activities and liabilities of credit rating agencies, (ii) short selling and naked short sales, (iii) temporary holding of shares before shareholders’ meetings, and (iv) mandatory takeovers.
SEC Proposes Rules for Say-on-Pay and Say-on-Golden-Parachute Votes
On October 18, 2010, the Securities and Exchange Commission ("SEC") proposed rules, available here, to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to: (1) shareholder advisory votes on executive compensation ("say-on-pay"); (2) shareholder advisory votes on the frequency of say-on-pay votes ("say-on-frequency"); and (3) shareholder advisory votes on compensation arrangements in connection with significant corporate transactions ("say-on-golden-parachutes"). The proposal includes transition provisions that companies may rely on until final rules are adopted. The SEC also proposed rules, available here, relating to disclosure by institutional investment managers of their proxy voting on executive compensation and other matters. Both rule proposals were issued pursuant to Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which we described in detail in our July 21, 2010 client memorandum, available here. Comments on the proposed rules should be submitted on or before November 18, 2010.