Final Rules

SEC adopts amendments giving authorities access to data obtained by security-based swap data repositories. The Securities and Exchange Commission announced that it has adopted amendments to a rule that would require security-based swap data repositories to make data available to regulators and other authorities, allowing them to share information and more effectively oversee the security-based swap market. (8/29/2016)

SEC announces new disclosure and reporting requirements for investment advisers. The SEC adopted amendments to several Investment Advisers Act rules and the investment adviser registration and reporting form that will require investment advisers to provide additional information regarding their separately managed account businesses, their branch office operations, and their use of social media. Investment advisers will also need to maintain additional records related to the calculation and distribution of performance information. The rule amendments will become effective on October 31, 2016. The compliance date for the new requirements will be October 1, 2017. (8/25/2016) SEC press release.

Proposed Rules and Requests for Comment

Proposed amendments would require hyperlinks to exhibits in filings. The SECannounced its proposed rule and form amendments that would require registrants that file registration statements and periodic and current reports subject to exhibit requirements under Item 601 of Regulation S-K, or that file on Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of the filings. The amendments would further require registrants to submit all of these filings in HTML format. The SEC will accept comments until 45 days following publication in the Federal Register. (8/31/2016)

SEC seeks additional comments on Regulation S-K disclosure requirements.The SEC requested comments on disclosure requirements in Subpart 400 of Regulation S-K relating to management, certain security holders, and corporate governance matters. Comments are due on or before October 31, 2016. (8/25/2016) SEC Release No 33-10198.

SEC allows additional time for comments on proposed property disclosures for mining registrants. The SEC extended the comment period for its proposed rules that would revise the property disclosure requirements for mining registrants until September 26, 2016. (8/23/2016) SEC Release No. 33-10127.


SEC offers guidance on definition of asset-backed security under Item 1101(c) of Regulation AB. The SEC’s Division of Corporation Finance revised its Compliance and Disclosure Interpretation on Item 1101(c) of Regulation AB to clarify that funding agreement-backed notes issued by an insurance company through a special purpose vehicle in which payments on the funding agreement are backed by the general account of the insurance company would not be considered asset-backed securities. (9/6/2016) SEC Regulation AB C&DIs.

No-Action Letters

Staff responds to Procter & Gamble’s request on Exchange Offer. The SEC’s Division of Corporation Finance responded to a request by The Procter & Gamble Company regarding an Exchange Offer of all outstanding shares of Galleria Company common stock for shares of P&G common stock. The Division noted that it will not recommend enforcement action if P&G conducts the Exchange Offer in the manner specified in the company’s letter. (9/1/2016) SEC no-action letter.

SEC grants no-action relief from credit risk retention requirements for CLOs subject to applicable margin reset mechanism. In response to a request by Sancus Capital Management LP, the SEC’s Division of Corporation Finance concurred that Sancus Capital’s proposed applicable margin reset, which is modeled after an auction rate mechanism found in auction rate securities, with respect to notes pursuant to a collateralized loan obligation would not constitute an “offer and sale of asset-backed securities by an issuing entity” within the meaning of Regulation RR, which establishes credit risk retention requirements for a securitizer of asset-backed securities. (9/1/2016) SEC no-action letter. 

NYSE Exchanges receive extensions to Sub-Penny Rule exemptions. The SEC extended the limited exemptions from Rule 612 under Regulation NMS, also known as the Sub-Penny Rule, granted to the New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. in connection with the operation of their Retail Liquidity Programs. The exemptions have been extended until December 31, 2016. (8/25/2016) SEC Release No. 34-78678 (NYSE and NYSE MKT) andSEC Release No 34-78677 (NYSE Arca).

Selected Enforcement Actions

SEC charges attorney and his companies in alleged waste-to-energy ventures.The SEC announced charges against attorney Donald Watkins and his companies, Watkins Pencor LLC and Masada Resource Group LLC, for violating the antifraud provisions of the federal securities laws and a related SEC antifraud rule. The complaint alleged that the defendants cheated professional athletes and other investors out of millions of dollars after falsely telling them that their funds would be used to support waste-to-energy ventures. The complaint further contended that the defendants falsely claimed that waste treatment company Waste Management Inc. was seriously considering purchasing Watkins Pencor, Masada, and its affiliated companies in a multi-billion-dollar transaction. (9/1/2016) Securities and Exchange Commission v. Watkins.

Other Developments

SEC provides notice of rulemaking actions expected to impact small entities.The SEC requested comments on an agenda of its rulemaking actions pursuant to the Regulatory Flexibility Act, which requires the SEC to identify rules that it will consider in the next 12 months that are likely to have a significant economic impact on a substantial number of small entities. Comments are due within 30 days of publication in the Federal Register. (9/2/2016) SEC Release No. 33-10203.

SEC makes FY 2017 annual adjustments to registration fee rates. The SECannounced that in fiscal year 2017, the fees that public companies and other issuers pay to register their securities with the agency will be set at US$115.90 per million dollars. (8/31/2016) SEC Release No. 33-10200.

SEC approves SIPC’s proposed bylaw amendment relating to fund assessments. The SEC approved a proposed bylaw amendment filed by the Securities Investor Protection Corporation (SIPC) relating to assessments on SIPC member broker-dealers. The SEC determined that the proposed bylaw amendment, which imposes an intermediary assessment rate that would apply when the SIPC Fund’s balance is expected to be US$2.5 billion for at least six months but its unrestricted net assets are less than US$2.5 billion, is in the public interest and consistent with the purposes of the Securities Investor Protection Act. The SEC further approved the proposed amendment regarding when a change in assessments becomes effective. (8/30/2016) SEC Release No. SIPA-178.

Second-largest whistleblower award announced. The SEC announced an award of over US$22 million to a whistleblower whose detailed tip and extensive assistance helped the agency stop a well-hidden fraud at the company where the whistleblower was an employee. This is the second-largest award that the SEC has given a whistleblower. (8/30/2016)

SEC finds FINRA’s and MSRB’s rules restricting political contributions substantially equivalent to SEC’s Pay-to-Play Rule. The SEC provided notice that it will issue orders with respect to Financial Industry Regulatory Authority Rule 2030 and Municipal Securities Rulemaking Board Rule G-37 finding that FINRA’s and the MSRB’s rules impose substantially equivalent or more stringent requirements on broker-dealers and municipal advisors than the SEC’s Play-to-Pay Rule imposes on investment advisers. Hearing requests should be received by the SEC by 5:30 p.m. on September 19, 2016. (8/25/2016)