At the American Bar Association’s Fall Meeting, Keith Higgins, Director of the SEC’s Division of Corporation Finance (the “Division”), gave his last “Dialogue with the Director” given the upcoming change in administration. Mr. Higgins presented his views on a broad range of areas, including the following:
- Amended Rule 147 and Rule 504 and new Rule 147A. The Federal Register should be publishing soon the final rules adopting amended Rule 147 and Rule 504 and new Rule 147A so that the effective dates will be early in 2017. We have commented on these rules in our client alert, available here.
- The FAST Act. All of the required rulemakings related to the Fixing America’s Surface Transportation (FAST) Act have been completed. The SEC must deliver on November 28, 2016 its report to Congress on recommendations to simplify the Regulation S-K disclosure rules. These recommendations are likely to take into account comments received with respect to the “400 Series” of Regulation S-K.
- Diversity Disclosures. The Division completed its disclosure recommendations relating to disclosures regarding board of director diversity. However, SEC Chair Mary Jo White has noted she does not expect the SEC to act on the recommendations before January 2017.
- At-the-Market Offerings. Mr. Higgins noted the Division’s review relating to disclosures available to investors in connection with at-the-market (“ATM”) sales by issuers. Mr. Higgins indicated that there has been continuing discussion with market participants regarding disclosure practices for plan of distribution sections of ATM prospectuses, including disclosures regarding “negotiated” sales and periodic sales. Mr. Higgins noted that there may be SEC Staff guidance forthcoming on these types of disclosures.
- Rule 701 and Form S-8. Given that companies are staying private longer, the SEC Staff has been receiving more questions on Securities Act Rule 701 and the use of registration statements on Form S-8, and the SEC Staff has issued C&DIs in response. For more information, see our blog post, available here.
- Looking into the Future. Mr. Higgins commented on the provisions of the proposed Financial CHOICE Act (the “CHOICE Act”), which may receive renewed interest and support by the new administration next year. For a summary of the securities law related provisions of the CHOICE Act, see our client alert, available here.
- Integration C&DI. The SEC Staff issued new guidance on Rule 506(b) and Rule 506(c) of Regulation D that treats Rule 506(c) offerings as “public offerings” for purposes of analogizing to Securities Act Rule 152.
- Shareholder Proposals. Mr. Higgins also addressed a number of shareholder proposal matters and pay ratio guidance.