In our “Mid-Year Review of SEC Enforcement,” we reviewed the transformation that had begun at the SEC’s Division of Enforcement under the agency’s new Chairman, Mary Schapiro, and the Division’s new Director, Robert Khuzami, as well as the measurable increase in enforcement activity that had resulted. Since then, Mr. Khuzami has articulated more specifically the changes the he plans to make, some of which are already in effect and others that have yet to be implemented. Nevertheless, the results of the Enforcement Division continue to reflect the heightened enforcement initiative that has been the calling card of this Commission. In this Year-End Review, we focus on the significant enforcement developments of the last six months, as well as notable cases and important trends revealed by annual enforcement statistics, both those disclosed by the SEC, as well as those that result from our own analysis. We also look ahead to the significant developments to anticipate in the coming year.
SEC Proposes to Amend Securities Act Rule 163 – Proposed Change May Facilitate “Wall-Crossed” Offerings by WKSIs
On December 21, 2009, the Securities and Exchange Commission issued a proposed amendment to paragraph (c) of Rule 163 under the Securities Act of 1933, as amended. Rule 163 was initially adopted in 2005 as part of the SEC’s Securities Offering Reform, which, among other things, eased many of the “gun jumping” restrictions on communications by issuers and others in connection with registered securities offerings. The proposed amendments to Rule 163 would further ease some of these restrictions and may thereby facilitate so called “wall-crossed” offerings by well-known seasoned issuers, or WKSIs.[1]
SEC Re-opens Comment Period for Proxy Access Proposal
The Securities and Exchange Commission (the "SEC") recently announced that it is re-opening the comment period for its June 2009 proposal regarding shareholder access to company proxy materials for director nominations (also known as "proxy access").[1] The SEC’s proposed rules, if adopted, would establish a federal proxy access right and permit proxy access shareholder proposals in company proxy materials.[2]
SEC Adopts Final Rules on Enhanced Proxy Statement Disclosures about Risk, Compensation and Other Corporate Governance Matters
At an open meeting held on December 16, 2009, the Securities and Exchange Commission ("SEC") approved a set of proposed rules to enhance the information provided to shareholders in company proxy statements regarding a number of risk oversight, compensation, board leadership and composition and other corporate governance matters. The SEC approved the final rules by a 4-to-1 vote, with Commissioner Kathleen Casey dissenting. The SEC released the text of the final rules on the same date they were adopted, with the 129 page adopting release available here.
RiskMetrics Group Releases Policy Updates for 2010 Proxy Season
On November 19, 2009, RiskMetrics Group (RiskMetrics), a leading proxy advisory firm, released its U.S. and international corporate governance policy updates for the 2010 proxy season. Please see the U.S. Corporate Governance Policy 2010 Updates (2010 Policy Updates) for details. The 2010 Policy Updates apply to annual meetings held on or after February 1, 2010. This client alert reviews the most significant U.S. policy updates and analyzes related matters for companies to consider now.
SEC’s Division of Corporation Finance Issues Guidance Facilitating Use of Lock-Up Agreements in Connection with Registered Exchange Offers
New Guidance Should Increase Attractiveness of Registered Exchange Offers as Means of Restructuring Outstanding Debt Securities
On November 16, 2009, the Staff of the Securities and Exchange Commission’s Division of Corporation Finance (the “Staff”) issued a new Compliance and Disclosure Interpretation (Interpretation #139.29) facilitating the ability of an issuer to enter into lock-up agreements (i.e., agreements to tender) with holders of its debt securities in connection with a registered exchange offer under the Securities Act of 1933, as amended (the “Securities Act”), for the issuer’s outstanding debt securities (the “Lock-Up Interpretation”).[1]
Every second counts – Secondary listings on European and US exchanges
New York partner Alan Bannister, Dubai associate Patrick Dykstra and London associate Claibourne Harrison are the authors of “Every second counts – Secondary listings on European and US exchanges” [pdf] in the November issue of The Brief.
The Big Seven Say ‘Yes’ – UK Banks Back New Code for Financial Reporting Disclosure
The Turner Review, published in March this year, identified a concern that in spite of banks’ efforts to enhance disclosures during 2008 and 2009, investor confidence in financial reports appeared to remain low.
Just Jargon? The New UK Listing Regime — “Premium” and “Standard” Listings
In January 2008, the Financial Services Authority (the “FSA”) began a review of the UK listing regime. In what appears to be a diametric move from the increasing heavy handed approach of the FSA in other areas of financial regulation, under the new listing rules UK companies will now be allowed to take advantage of an easier route to achieving a listing on the main market of the London Stock Exchange.
Private Fund Investment Advisers Registration Act Approved by House Committee
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is closely tracking government responses to the turmoil that has catalyzed a dramatic and rapid reshaping of our capital and credit markets. We are providing updates on key regulatory and legislative issues, as well as information on legal and oversight issues, that we believe could prove useful as firms and other entities navigate these challenging times.