Washington, D.C. partners Amy Goodman, Ronald Mueller and Elizabeth Ising are the authors of "Executive Compensation, Corporate Governance and Other Securities Disclosure Provisions in the Dodd-Frank U.S. Financial Regulatory Reform Act" [PDF] published in BNA’s Securites Regulation & Law on September 20, 2010.
SEC Proposes Rules to Enhance Disclosure of Short-Term Borrowings and Issues Interpretive Release Regarding Disclosure of Liquidity and Capital Resources
On September 17, 2010, the Securities and Exchange Commission ("SEC") unanimously voted to publish for comment proposed rules that would require registrants to increase disclosure of short-term borrowing arrangements in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A"). The SEC also unanimously voted to issue an interpretive release reiterating its long-standing guidance regarding liquidity and capital resources disclosure requirements in MD&A.
The Annual Risk Assessment Requirement for Investment Advisers: Keeping Your Review Current
Rule 206(4)-7 under the Investment Advisers Act of 1940 (the "Advisers Act") requires registered investment advisers to adopt and implement written policies and procedures that are reasonably designed to prevent violations of the Advisers Act by the adviser and any of its supervised persons within the meaning of Advisers Act section 202(a)(25). The adviser’s policies and procedures must also be reasonably designed to detect and promptly address any violations that occurred. Advisers Act Rule 206(4)-7(b) further requires investment advisers to undertake an annual review to determine the adequacy and effectiveness of their procedures in light of internal and external developments affecting the firm.
Webcast – Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act
On July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping financial reform legislation in over a generation. Gibson Dunn panelists discuss the regulatory initiatives in the bill that are likely to be of interest and concern to the wide range of companies affected by the bill.
U.S. SEC Adopts Final Rules on Proxy Access
Today the U.S. Securities and Exchange Commission ("SEC") adopted amendments to its proxy rules to permit shareholders to include their director candidates in a company’s proxy materials–commonly referred to as "proxy access." The vote on the amendments was 3-2, with Commissioners Casey and Paredes dissenting due to numerous concerns, including that the proxy access rules encroach on state corporate law and interfere with private ordering by companies and their shareholders.
FASB Extends by 30 Days the Period for Comment on Proposed Changes to U.S. Accounting Standards Governing Loss Contingencies
On August 18, 2010, the Financial Accounting Standards Board ("FASB") announced that it is extending by 30 days to September 20, 2010 the deadline for comments on the FASB’s proposed amendments to the U.S. accounting standards governing the disclosure of loss contingencies, including litigation-related contingencies. Given the broad scope of the FASB’s proposed modifications and the challenges they would pose to financial statement preparers, we encourage companies who have not already commented on the proposal to submit comments by the new deadline.
Delaware Court of Chancery Issues Important Poison Pill Opinion
On August 11, 2010, the Delaware Court of Chancery issued an important opinion in the area of stockholder rights plans, or poison pills. Vice Chancellor Strine’s opinion in Yucaipa American Alliance Fund II, L.P. v. Riggio et al., 2010 WL 3170806 (Del. Ch. Aug. 11, 2010), reaffirms Delaware’s traditional deference to a board’s well-informed and well-reasoned implementation of antitakeover measures, and gives meaningful guidance to boards and their advisors in the implementation of poison pills and other defensive measures in the face of a potential unsolicited change in control situation.
SEC Chairman Schapiro Announces Process for Commenting in Advance on Dodd-Frank Rulemaking
On July 27, 2010, U.S. Securities and Exchange Commission ("SEC") Chairman Mary L. Schapiro announced that the SEC is implementing a new process designed to make it easier for the public to provide comments as the SEC undertakes the process of adopting rules required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act"), which President Obama signed into law last week. The SEC established the new process in order to provide expanded opportunity for public comment and greater transparency and accountability.
U.S. Regulatory Reform Heads to the Implementation Phase
Dodd-Frank Wall Street Reform and Consumer Protection Act Signed by the President
On July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping financial reform legislation in over a generation. The law was largely the product of public consternation and anxiety following the 2008 financial crisis and subsequent recession. The signing of the bill does not, however, mark the end of the process for this round of financial reform and regulation. Despite the President’s comments yesterday that the new law "provides certainty to everybody, from bankers to farmers to business owners to customers," the reality is that Dodd-Frank leaves to regulators the task of conducting pivotal studies, defining core terms, and drafting comprehensive rules, regulations and exceptions that will answer many central and currently open questions raised by the legislation. And so, short of reaching our destination, we have just embarked on the second leg of a long journey.
Securities and Exchange Commission Issues Concept Release Seeking Public Comment on U.S. Proxy System
The principal mechanism for U.S. shareholder participation in corporate governance is being comprehensively scrutinized by the Securities and Exchange Commission (the "SEC") for the first time in almost thirty years. On July 14, 2010, the SEC issued a concept release seeking public comment on numerous fundamental aspects of the U.S. proxy system (the "Concept Release"). Noting concerns from both issuers and investors, the SEC proposes to examine the integrity and efficiency of the proxy system as a whole. Although it is not presented as a rulemaking proposal, the Concept Release will likely lead to significant SEC rulemaking in the coming years. Given the wide range of parties with vested interests in the proxy system, members of the corporate community should strongly consider participating in the dialogue related to this important area by submitting comments to the SEC, either individually or through collective means.