Free Writings + Perspectives

News and Views on Securities Regulation and Capital Formation

The Securities and Exchange Commission proposed rule amendments that are intended to modernize the offering related provisions of the Securities Act and the communications safe harbors available to business development companies (BDCs) and closed-end funds (CEFs) in order to bring these to parity with the provisions applicable to operating companies.  The Commission was required to undertake rulemaking with respect to BDCs by the Small Business Credit Availability Act.  (See our chart that summarizes the affected…
The Securities and Exchange Commission adopted additional amendments that are intended to simplify disclosure requirements for public companies, investment advisers and investment companies.  The proposed amendments are based on the Commission Staff’s FAST Act Report.  Among other things, the amendments will: Allow registrants to omit confidential information from most exhibits without filing confidential treatment requests; Provide registrants greater flexibility with respect to the presentation of historical periods within the MD&A section of filings: Revise the…
In her first speech as the SEC’s Advocate for Small Business Capital Formation, Martha Miller provided an overview of the Office’s mission, as well as the Office’s priorities.  Miller noted the importance of the small businesses in the United States, and commented on access to funding.  She observed that in recent years, the amounts raised in exempt securities offerings has outpaced the amounts raised in registered securities offerings.  While there is significant private capital available,…
At the ICI Conference, Dalia Blass, Director of the Securities and Exchange Commission’s Division of Investment Management, provided some insights on upcoming rulemaking initiatives.  Director Blass noted that we should anticipate a proposal soon for business development company and closed-end fund offering reform, as well as recommendations for a proposal on modernizing the advertising and solicitation rules for investment advisers and a proposal for use of derivatives by investment companies.  She also noted that the…
On March 28, 2019, the Securities and Exchange Commission’s Investor Advisory Committee will hold its next meeting, which will be open to the public and webcast.  The agenda items for the upcoming meeting include the following:  a discussion on investor protection; a discussion of trends relating to investment research.  The Committee also is scheduled to discuss disclosures on human capital.…
At a recent Practising Law Institute conference, William Hinman, Director of the Securities and Exchange Commission’s Division of Corporation Finance, commented on the application of the Commission’s principles-based disclosure requirements to areas posing complex risks, such as Brexit.  Hinman noted that, “[p]rinciples-based disclosure requirements articulate an objective and look to management to exercise judgment in satisfying that objective by providing appropriate disclosure when necessary.”  The particular areas in which preparers of filings might consider addressing…
On February 28, 2019, the staff of the Securities and Exchange Commission’s Division of Investment Management issued a no-action letter to the Independent Directors Council permitting board members of a business development company to vote by telephone, video conference or other remote means in certain circumstances.  This modernized position softens, but does not eliminate, the unnecessary burden for BDCs and their boards to adhere to certain in-person voting requirements.  For example, the Investment Company Act…
In a recent article, Edward Knight, the global chief legal and policy officer at Nasdaq Inc., offered his own views on reforms that would contribute to greater resiliency for the US capital markets.  Knight suggests that greater retail participation in the stock markets should be encouraged.  He looks to Sweden’s investment savings accounts, which provide for investments to be made in various securities, with tax liability assessed based on the value of the account, as…
Earlier this week, Commissioner Peirce addressed a number of topics with the Council of Institutional Investors.  Commissioner Peirce noted that the Securities and Exchange Commission remains focused on refining the securities offering and disclosure regime.  She pointed to the Commission’s proposed extension of the test-the-waters provision, as well as to the amendments to Regulation A making the exemption available to Exchange Act reporting companies.  Commissioner Peirce noted that the Division of Corporation Finance continues to…
In recent years, the Staff of the Securities and Exchange Commission (the “SEC”) has been providing comments regarding companies’ presentations of non-GAAP financial measures in public filings.  We surveyed and discussed the non-GAAP comments issued by the Staff to REITs, which can be found here.  In the period since the publication of the survey, based on a review of comment letters issued in the last six to nine months, we note that the SEC…