The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
SEC adopts rules to permit crowdfunding
SEC - 10/30/2015
The SEC has adopted final rules to permit companies to offer and sell securities through crowdfunding. Crowdfunding is an evolving method of raising capital that has been used to raise funds through the Internet for a variety of projects. Title III of the JOBS Act created a federal exemption under the securities laws so that this type of funding method can be used to offer and sell securities. The SEC is also proposing amendments to existing Securities Act rules to facilitate intrastate and regional securities offerings.
SEC issues staff legal bulletin on shareholder proposals
SEC - 10/22/2015
The SEC's Division of Corporation Finance has published Staff Legal Bulletin No. 14H (CF), Shareholder Proposals, containing guidance on two issues regarding shareholder proposals under Exchange Act Rule 14a-8: (1) the scope and application of Rule 14a-8(i)(9) on the exclusion for conflicting proposals. In the new SLB, the SEC staff interprets the Rule 14a 8(i)(9) exclusion more narrowly than before, limiting its scope to “direct conflicts;” and (2) the scope and application of Rule 14a-8(i)(7) on the exclusion for ordinary business in light of Trinity Wall Street v. Wal-Mart Stores, Inc. The SLB reaffirms the SEC staff’s prior position that a proposal that focuses on significant policy issues necessarily transcends ordinary business operations, and is therefore not excludable under Rule 14a-8(i)(7).
SEC issues additional FAQs on Volcker Rule
SEC - 09/25/2015
The staff of the Divisions of Trading and Markets, Investment Management, and Corporation Finance issued two additional frequently asked questions and answers (FAQs) concerning the SEC’s final rule implementing section 13 of the Bank Holding Company Act of 1956 (“BHC Act”), commonly referred to as the “Volcker Rule.” The new FAQs address: (1) CEO certification for prime brokerage transactions and (2) compliance for market making and the identification of covered funds.
SEC seeks comments on the effectiveness of financial disclosure requirements in Regulation S-X
SEC - 09/25/2015
The SEC has published a request for comments regarding the effectiveness of financial disclosure requirements in Regulation S-X. The request for comment focuses on the requirements for the form and content of financial disclosures that companies must file with the Commission about acquired businesses, affiliated entities, and guarantors and issuers of guaranteed securities.
SEC proposes liquidity management rules for mutual funds and ETFs
SEC - 09/22/2015
The SEC proposed a comprehensive package of rule reforms designed to enhance effective liquidity risk management by open-end funds, including mutual funds and exchange-traded funds (ETFs). Under the proposed reforms, mutual funds and ETFs would be required to implement liquidity risk management programs and enhance disclosure regarding fund liquidity and redemption practices. The proposal is designed to better ensure investors can redeem their shares and receive their assets in a timely manner.
SEC approves the reorganization of PCAOB auditing standards
SEC - 09/17/2015
The SEC issued an order approving the reorganization of the PCAOB's auditing standards. On March 31, the PCAOB adopted amendments to its rules and standards to implement a topical system that integrates the existing interim and PCAOB-issued auditing standards to help users navigate the standards more easily.
SEC staff issues Risk Alert on cybersecurity examination initiative
SEC - 09/15/2015
The SEC Office of Compliance Inspections and Examinations (OCIE) has published a Risk Alert to provide information on the areas of focus for OCIE’s second round of cybersecurity examinations. In April 2014, OCIE announced a series of examinations to identify cybersecurity risks and assess cybersecurity preparedness in the securities industry. Given the continued importance of cybersecurity and the positive response from broker-dealers and advisers on OCIE’s efforts, OCIE announced a focus on cybersecurity compliance and controls as part of its 2015 Examination Priorities. This Risk Alert provides additional information on the areas of focus.
SEC adopts rule for pay ratio disclosure
SEC - 08/5/2015
The SEC adopted a final rule that requires a public company to disclose the ratio of the compensation of its CEO to the median compensation of its employees. The new rule, mandated by the Dodd-Frank Act, provides companies with flexibility in calculating this pay ratio, and helps inform shareholders when voting on “say on pay.” The new rule will provide shareholders with information they can use to evaluate a CEO’s compensation, and will require disclosure of the pay ratio in registration statements, proxy and information statements, and annual reports that call for executive compensation disclosure. Companies will be required to provide disclosure of their pay ratios for their first fiscal year beginning on or after January 1, 2017.
See the SEC's website for a complete list of all outstanding proposed rules.
Proposed Rule: Amendments to Facilitate Intrastate and Regional Securities Offerings
SEC - 10/30/2015
The SEC is proposing amendments to Rule 147 under the Securities Act of 1933, which currently provides a safe harbor for compliance with the Section 3(a)(11) exemption from registration for intrastate securities offerings. This proposal would modernize the rule and establish a new exemption to facilitate capital formation, including through offerings relying upon recently adopted intrastate crowdfunding provisions under state securities laws. The proposed amendments to the rule would eliminate the restriction on offers and ease the issuer eligibility requirements, while limiting the availability of the exemption at the federal level to issuers that comply with certain requirements of state securities laws.
SEC Proposed Rule: Open-End Fund Liquidity Risk Management Programs; Swing Pricing; Re-Opening of Comment Period for Investment Company Reporting Modernization Release
SEC - 09/22/2015
The SEC is proposing a new rule and amendments to its rules and forms designed to promote effective liquidity risk management throughout the open-end fund industry, thereby reducing the risk that funds will be unable to meet redemption obligations and mitigating dilution of the interests of fund shareholders in accordance with section 22(e) and rule 22c-1 under the Investment Company Act. The proposed amendments also seek to enhance disclosure regarding fund liquidity and redemption practices.
SEC Proposed Rule: Listing Standards for Recovery of Erroneously Awarded Compensation
SEC - 07/02/2015
The SEC is proposing rule and rule amendments that would direct the national securities exchanges and national securities associations to establish listing standards that would require each issuer to develop and implement a policy providing for the recovery, under certain circumstances, of incentive-based compensation based on financial information required to be reported under the securities laws that is received by current or former executive officers, and require the disclosure of the policy. A listed issuer would be required to file the policy as an exhibit to its annual report.
See the SEC's website for a complete list of all final rules.
SEC Final Rule: Crowdfunding
SEC - 10/30/2015
The SEC has adopted new Regulation Crowdfunding under the Securities Act of 1933 and the Securities Exchange Act of 1934 to implement the requirements of Title III of the JOBS Act. The new regulation prescribes rules governing the offer and sale of securities under new Section 4(a)(6) of the Securities Act of 1933. It also provides a framework for the regulation of registered funding portals and broker-dealers that issuers are required to use as intermediaries in the offer and sale of securities in reliance on Section 4(a)(6).
SEC Final Rule: Pay Ratio Disclosure
SEC - 08/05/2015
The SEC has adopted amendments to Item 402 of Regulation S-K to implement Section 953(b) of the Dodd-Frank Act to require a public company to disclose the ratio of the compensation of its CEO to the median compensation of its employees. The new rule provides companies with flexibility in calculating this pay ratio, and helps inform shareholders when voting on “say on pay.” The new rule will provide shareholders with information they can use to evaluate a CEO’s compensation, and will require disclosure of the pay ratio in registration statements, proxy and information statements, and annual reports that call for executive compensation disclosure. Companies will be required to provide disclosure of their pay ratios for their first fiscal year beginning on or after January 1, 2017.
SEC Division of Corporation Finance: Financial Reporting Manual (Updated August 2015)
SEC - 08/25/2015
The SEC's Division of Corporation Finance has published an updated version of Financial Reporting Manual. The manual serves as an internal, informal reference document to provide general guidance to SEC staff when reviewing for compliance with SEC reporting rules. Though nonauthoritative, the manual is a helpful source for companies and auditors to refer to for general information on SEC reporting matters. The manual covers a variety of topics such as financial statement requirements, pro forma information, non-GAAP measures, and MD&A, to name a few.
For a complete list of speeches and other public statements by the Chairman, Commissioners, and staff of the SEC, which cover a wide range of topics concerning the state of the markets and the Commission's regulatory agenda, visit the SEC’s website.
Remarks by James Schnurr Before the UCI Audit Committee Summit
SEC - 10/23/2015
SEC Chief Accountant James Schnurr shared his thoughts and perspectives on several key issues facing audit committees – the Commission’s Concept Release on Audit Committee Disclosures, the importance of internal control over financial reporting, implementation of the new revenue recognition standard, and disclosure effectiveness.
Remarks by James Schnurr at the AICPA National Conference on Banks and Savings Institutions
SEC - 09/17/2015
SEC Chief Accountant James Schnurr shared his thoughts and perspectives on some of OCA's key priorities — implementation of the new revenue recognition standard, the upcoming release of the FASB’s new credit impairment standard, and current thinking with respect to IFRS.
Remarks by Wesley Bricker at the Bloomberg BNA Conference on Revenue Recognition
SEC - 09/17/2015
SEC Deputy Chief Accountant Wesley Bricker discussed the SEC's strategy to navigate the transition to the new revenue recognition standard. This strategy not only considers the role of reasonable professional judgment but also the importance of simply getting the job done.
Remarks by Kara Stein to the Institute of Chartered Accountants in England and Wales and British-American Business
SEC - 09/09/2015
SEC Commissioner Kara Stein shared her views on how accountants — in an era of tremendous technological change — can be leaders in moving capital markets and our economy forward.
SEC staff publishes compliance and disclosure interpretations re: unbundling items for shareholder vote in an M&A context
SEC - 10/27/2015
The SEC's Division of Corporation Finance (Corp Fin) issued two new Compliance and Disclosure Interpretations (C&DIs) on Exchange Act Rule 14a-4(a)(3). Exchange Act Rule 14a-4(a)(3) addresses the “unbundling” of separate matters that are submitted to a shareholder vote. The two interpretations address unbundling under Rule 14a-4(a)(3) in the context of mergers, acquisitions, and similar transactions and replace the “September 2004 Interim Supplement to Publicly Available Telephone Interpretations" (Regarding Unbundling under Rule 14a-4(a)(3) in the M&A Context).
SEC staff issues new Compliance and Disclosure Interpretation on Regulation AB and related rules
SEC - 09/16/2015
The SEC's Division of Corporation Finance has published a new Compliance & Disclosure Interpretation (C&DI) on Regulation AB and related rules. The new C&DI (section 311.02) addresses asset-level disclosure for offerings of asset-backed securities backed by residential mortgages, commercial mortgages, auto loans, auto leases, and debt securitizations (including resecuritizations).
SEC staff publishes new compliance and disclosure interpretations
SEC - 08/06/2015
The SEC's Division of Corporation Finance (Corp Fin) has released updates to two Compliance and Disclosure Interpretations (C&DIs) publications: (1) Securities Act Rules (new questions 256.23 to 256.33 were added under "Section 256. Rule 502 — General Conditions to be Met") and (2)Securities Act Forms (new question 130.15 was added under "Section 130. Form D").