On February 10, 2022, the U.S. Securities and Exchange Commission (the “SEC”) proposed amendments to accelerate the filing deadlines for Schedule 13D and Schedule 13G beneficial ownership reports, expand beneficial ownership reporting obligations to include the acquisition of certain derivative securities and clarify the standards for formation of a group that would be subject to beneficial ownership reporting obligations. The proposed amendments are intended to provide more timely information to meet the needs of the current financial markets. SEC Chair Gary Gensler stated, “These amendments would update our reporting requirements for modern markets, reduce information asymmetries, and address the timeliness of Schedule 13D and 13G filings. Investors currently can withhold market moving information from other shareholders for 10 days after crossing the 5 percent threshold before filing a Schedule 13D, which creates an information asymmetry between these investors and other shareholders. The filing of Schedule 13D can have a material impact on a company’s share price, so it is important that shareholders get that information sooner.”
Continue Reading SEC Proposes Amendments to Schedule 13 Beneficial Ownership Reporting Requirements

*This post has been updated as of August 4, 2020.

On May 20, 2020, the Securities and Exchange Commission formally adopted amendments to financial disclosure regulations regarding the acquisition and disposition of certain businesses. The final rules – which are intended to update disclosure requirements for the benefit of registrants and investors – represent the most comprehensive revision to the SEC’s regulations in this area in more than 30 years. The new rules can be found here.
Continue Reading SEC Adopts Comprehensive Changes to “Significance” Tests and Financial Disclosure Requirements of Acquired and Disposed Businesses

With annual reports on Form 10-K publicly filed and first quarter earnings releases getting underway, proxy season – the annual practice of filing and distributing proxy statements, reserving meeting venues and courting shareholders – is now in full effect.
Continue Reading Virtual and Hybrid Shareholder Meetings in the Era of COVID-19: What Public Companies Need to Know

On March 12, 2020, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to the definition of “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2, which amendments will be effective 30 days after publication in the Federal Register and will apply to annual report filings due on or after such effective date.
Continue Reading SEC Amends Definitions of “Accelerated Filer” and “Large Accelerated Filer” and Provides Relief to Small Issuers from Auditor Attestation Requirements

The Securities and Exchange Commission (“SEC”) announced on September 26, 2019 that it voted to adopt the application of “testing-the-waters” rules to all issuers who engage in raising capital in the public markets. This represents a significant expansion of that accommodation, as those rules were previously only available to certain issuers classified as emerging growth companies or “EGCs.” The new Rule 163B will become effective 60 days after publication in the Federal Register.
Continue Reading Gauging Interest: SEC Votes to Approve Proposal to Expand “Test-the-Waters” Rules

On December 19, 2018, the SEC announced that it had adopted final rules that allow reporting companies to rely on the Regulation A exemption from registration for their securities offerings.[1]

Until recently, the only way that companies subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) have been able to access the capital markets has been through a private placement in public equity (PIPE) or a traditional registered public offering. PIPE’s have presented a number of issues regarding confidentiality, illiquidity of securities, limitations on offering size[2] and greater pricing discounts, whereas registered public offerings can be both time-consuming and costly. These issues are particularly magnified for smaller public companies that may not be eligible to use S-3 shelf registrations.
Continue Reading Expansion of Regulation A to Reporting Companies: Increased Alternatives Now Available to Public Companies Seeking to Raise Capital or for Mergers and Acquisitions

Although EDGAR continues to accept filings, the government shutdown has now eclipsed its 28th day and the SEC continues to operate with limited staff which is having a crippling effect on the ability of many companies to raise money in the public markets. This is particularly due to the fact that the SEC is unable to perform many of the critical functions during the lapse in appropriations, including the review of new or pending registration statements and/or the declaration of effectiveness of any registration statements.
Continue Reading The Effects of the SEC Shutdown on the Capital Markets

On June 28, 2018, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to the definition of “smaller reporting company” which expand the number of companies that qualify as smaller reporting companies and can thereby take advantage of the scaled disclosure requirements applicable to such companies. The amendments to the definition of “smaller reporting company” will be effective on September 10, 2018.
Continue Reading SEC Expands the Definition of “Smaller Reporting Company”

On May 24, 2018, President Donald J. Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”). The Act, which primarily focuses on rolling back certain regulatory provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, also contained a significant change in the law for companies looking to undertake securities offerings in reliance on the revamped Regulation A (commonly referred to as “Regulation A+”) under the Securities Act of 1933.
Continue Reading New Law Requires SEC to Expand Regulation A+ To Exchange Act Reporting Companies

SNAP Inc., the parent company of Snapchat, went public yesterday with a valuation of approximately $33.4 billion. The Company raised $3.4 billion at $17 per share, and is now trading well above the IPO price. While SNAP has reported growing revenues ($404.5 million in 2016, up from $58.7 million in 2015), it has also reported growing net losses ($514.6 million in 2016, up from $372.9 million in 2015).
Continue Reading SNAP IPO Debuts On NYSE

On July 10, 2013, the SEC adopted the amendments required under the JOBS Act to Rule 506 that would permit issuers to use general solicitation and general advertising to offer their securities, subject to certain limitations. In addition, the SEC amended Rule 506, as required by the Dodd-Frank Act, to disqualify felons and other bad actors from being able to rely on Rule 506. The long-awaited new rules will allow issuers that are permitted to rely on Rule 506 to more widely solicit and advertise for potential investors, including on the Internet and through social media.

The SEC also adopted an amendment to Rule 144A that provides that securities may be offered pursuant to Rule 144A to persons other than qualified institutional buyers, provided that the securities are sold only to persons that the seller and any person acting on behalf of the seller reasonably believe are qualified institutional buyers.Continue Reading SEC Eliminates the Prohibition on General Solicitation for Rule 506 and Rule 144A Offerings