1. The House of Representatives passed the “Wall Street Reform Act” on a 223-202 vote, with 27 Democrats joining all Republicans against. The bill is a big one, and proposed amendments came fast and furious. The “non-accelerated filer” permanent exemption from filing auditor attestation reports on internal controls remains in the bill, at least for now (but see fodder for opponents here). A version of the bill as passed hasn’t been fully assembled yet and, in any case, it will have to be reconciled with the Senate bill(s). Some brief commentary on the accounting implications of the bill is here. Out of the gate, House Financial Services Chair Barney Frank has taken the early lead on adding his political veneer to the debate on the bill (see his various postings and op-ed piece here) compared to Ranking Minority Member Bachus’s release here (“this is bad!”).
  2. RiskMetrics issued its 2010 U.S. Proxy Voting Guidelines Summary last week, here, which includes the updates (here) we noted last month and which are effective for shareholder meetings on or after February 1, 2010. The 71-page “summary” condenses RM’s U.S. Proxy Voting Manual, which it has not posted on its website.
  3. The SEC issued guidance, here, on transitional issues for the enhanced proxy disclosure rules, which we mentioned in a rare supplemental alert a few weeks ago (here). The upshot for calendar year-end companies: if you file your definitive proxy statement before February 28, 2010, you don’t need to comply with the new rules until next year. (And if you’re a registered investment company, check out the Division of Investment Management’s FAQs here.)
  4. The SEC also re-opened, here, the comment period for its proxy access rules, allowing additional comments until January 19 and an opportunity for more debate among commentators. A key debate point is whether the SEC will adopt a “private ordering model” in which shareholder bylaw amendments to structure the director election process would be allowed but nothing would be mandated by the SEC, whether an “opt out” of SEC requirements should be implemented, or whether the SEC will retain the proposed “mandatory minimum” access requirements. The extension itself has caused a flurry of speculation about what the SEC’s action heralds, and possibly some fear, or hope, that this proposal will fade like the SEC’s effort in 2003.
  5. Although the risk-related disclosures in the SEC’s enhanced proxy disclosure rules were toned down substantially from proposed rules, risk assessment, and the board’s oversight role, remains a hot topic for 2010. Some items of note:
  • “A New, Practical Approach to Board Oversight of Risk” is here.
  • Commentary from Harvard Law School’s Forum on Corporate Governance and Financial Regulation is here.
  • FEI’s commentary on the PCAOB re-proposed risk assessment rules, which react to earlier comments and give more time to comment, is here.
  1. The SEC also posted new CDIs on non-GAAP Financial Measures, here.
  2. The SEC proposed rules, here, to amend SEC Rule 163(c) to further facilitate public offerings by WKSIs by allowing underwriters to gauge interest in an offering before a preliminary or shelf S-3 filing without violating gun-jumping rules.
  3. The IRS issued Notice 2010-6, here, offering employers yet another chance to correct non-409A compliant documents and providing yet more guidance on language that will be treated as 409A compliant, including, for example, amendments to “change in control” definitions in employment and severance agreements. (And note that some wacky transitional rules apply under the Notice.)
  4. The end of a year is always followed by a host of “year in review” summaries. Here are a smattering for 2009:
  • Securities class action filings, here (way down from the 2008 frenzy)
  • EEOC complaints, here (near record highs)
  • Criminal anti-trust enforcement, here (continuance of the “breathtaking pace of aggressive enforcement”)
  • FCPA enforcement, here (“the single most dramatic year”)
  • Shareholder proxy proposals, here (echoing but overshadowed by regulatory reform)
  • SEC Chair Schapiro in review, here
  • Winner of the worst proxy footnote for 2009, here (“we had darn good reasons for buying our CEO’s map collection”)
  1. Finally, a contract drafting suggestion. In credit and acquisition agreements, it’s typical that a company represents it has had no “reportable events,” events that must be reported to the Pension Benefits Guaranty Corporation unless reporting has been waived under PBGC regulations. In credit agreements, an unwaived “reportable event” may be an event of default or require reporting to the lender. It’s likely the PBGC will adopt regulations to eliminate most automatic waivers of “reportable events” sometime in 2010. A brief summary of the regulations is here. It’s not too early to pause, at least, to consider whether you need to set new internal standards to act on reportable events that are currently no cause for action because of the automatic waivers, or to change the default terms or reporting covenants in your credit agreements.