Final Rules

SEC implements JOBS Act and FAST Act revisions to Securities Exchange Act registration requirements. The Securities and Exchange Commission approved final rules that revise certain registration requirements under Section 12(g) of the Securities Exchange Act, as provided by the Jumpstart Our Business Startups Act and the Fixing America’s Surface Transportation Act, including the thresholds for registration, termination of registration, and suspension of reporting. The final rules will become effective on June 9, 2016. (5/3/2016) SEC press release.

Proposed Rules

SEC approves joint agency proposal on incentive-based compensation arrangements at financial institutions. The SEC, along with five other federal financial regulators, approved a joint notice of proposed rulemaking that re-proposes regulations that would impose restrictions on incentive-based compensation practices at certain financial institutions. The proposed rule would prohibit incentive-based payment arrangements that provide excessive compensation, could potentially result in material loss, or might otherwise encourage inappropriate risks. The rules also would require the largest financial institutions to include bonus deferral and clawback provisions in the compensation arrangements for certain senior executives. Comments are due on or before July 22, 2016. (5/6/2016) SEC Release No. 34-77776.


SEC issues small entity compliance guides on Regulation Crowdfunding. The SEC published two new small entity compliance guides related to Regulation Crowdfunding, which became effective on May 16, 2016. The first guide,Regulation Crowdfunding: A Small Entity Compliance Guide for Issuers, provides an overview of the new rules for companies issuing securities in reliance on Regulation Crowdfunding. The second guide, Regulation Crowdfunding: A Small Entity Compliance Guide for Crowdfunding Intermediaries, offers guidance on the application of the rules to crowdfunding intermediaries, including registered broker-dealers and funding portals. (5/13/2016)

Division of Corporation Finance issues new C&DIs on Regulation Crowdfunding. The SEC’s Division of Corporation Finance published new Compliance and Disclosure Interpretations on Regulation Crowdfunding that address questions about the crowdfunding exemption and requirements, disclosure requirements, advertising, and promoter compensation. (5/13/2016) Regulation Crowdfunding C&DIs. 

Speeches and Statements

New privacy laws would frustrate SEC’s enforcement efforts, says White. TheNew York Times published an op-ed by SEC Chair Mary Jo White in which she objected to proposed legislation that would prevent civil law enforcement agencies from accessing electronic records from Internet service providers by requiring a criminal warrant to access those records. White argued that, after first requesting records directly from the individual, civil agencies should be able to seek a court order similar to a warrant, which could be challenged in court by the individual under investigation. (5/12/2016)

White emphasizes SEC’s commitment to supporting capital formation for small companies. In remarks at the International Organization of Securities Commissions Annual Conference, SEC Chair Mary Jo White highlighted recent SEC efforts to facilitate capital formation for small and emerging companies, including new crowdfunding rules, the “IPO on-ramp” for emerging growth companies, and proposed revisions to the SEC’s disclosure regime. (5/11/2016) White remarks.

Stein calls on SEC to revamp disclosure for the Digital Age. SEC Commissioner Kara M. Stein delivered a speech at the 48th Annual Rocky Mountain Securities Conference in which she urged the SEC to form a Digital Disclosure Task Force, which would include investors, analysts, academics, companies, and technology experts, to explore “what disclosure should look like in the Digital Age.” (5/6/2016) Stein remarks.

Deputy Chief Accountant urges companies to review practices related to non-GAAP reporting. In remarks before the Baruch College Financial Reporting Conference, SEC Deputy Chief Accountant Wesley R. Bricker reviewed the ongoing transition period activities for new standards on revenue recognition and voiced concerns about non-GAAP reporting practices. (5/5/2016) Bricker remarks.

Other Developments

Whistleblower earns award for tip that bolstered SEC’s ongoing investigation.The SEC announced that has awarded a whistleblower award of over $3.5 million to a company employee who provided additional evidence of misconduct to the SEC during an ongoing investigation. The SEC noted that although the whistleblower’s tip did not initiate the investigation, the whistleblower was still eligible for an award because the tip significantly strengthened the SEC’s case. (5/13/2016) SEC press release.

PCAOB’s proposed audit firm and engagement partner disclosure rules approved by SEC. The SEC approved the Public Company Accounting Oversight Board’s plan to adopt new rules that will require registered public accounting firms to disclose the names of the engagement partners and other accounting firms that participate in an audit. The rules require firms to disclose information about engagement partners for audit reports issued on or after January 31, 2017, and to disclose information about the accounting firms for audit reports issued on or after June 30, 2017. (5/9/2016) SEC Release No. 34-77787.