JOBS Act 3.0:
In July 2018, the U.S. House of Representatives overwhelmingly passed (406-4) a set of bills packaged together as the JOBS and Investor Confidence Act of 2018 (known as “Jobs Act 3.0”), intended to expand on market-friendly changes to the securities law made by the JOBS Act in 2012. It is not clear if or when Congress will adopt JOBS Act 3.0, but it is likely that the SEC – which has taken a market-friendly approach under Chair Jay Clayton – will act on its own to make a few of the changes in the bill. For example, the SEC is already working on a proposal to expand pre-IPO testing the waters to all issuers (which is currently only available to emerging growth companies).
Bank holding company disclosure:
The SEC is expected to propose amendments to the specialized disclosure under Guide 3 for bank holding companies. Read more...
Review of public company reporting system:
In August 2018, President Trump directed the SEC to study whether to move to a semi-annual rather than quarterly reporting system. The SEC has put on its near-term agenda issuing a concept release reviewing the quarterly reporting requirement.
Easing of disclosure rules for guaranteed securities:
The SEC will likely adopt in some form the changes it proposed in July 2018 that would ease the financial disclosure requirements for guaranteed securities. If adopted as proposed, the changes will make SEC-registered debt offerings more attractive for issuers. Read more...
Accredited investor definition:
Although the SEC has not yet acted on the Dodd-Frank Act-mandated accredited investor report it issued in December 2015, it may move soon to expand the definition, whether because of Congressional direction to do so (many of the bills introduced in the House of Representatives have included changes to the definition) or on its own accord. SEC Chair Jay Clayton has said that he wants to expand retail investors’ access to private investments, including by adding sophistication tests as alternatives to asset tests.
More disclosure effectiveness:
The SEC is expected to propose rules based upon the concept release it issued in April 2016 as part of its “disclosure effectiveness” initiative. The focus of the release is Regulation S-K’s business and financial requirements. Read more…
Changes to SEC’s whistleblower program:
Despite the dissent of two Commissioners, the SEC’s three Republican-appointed Commissioners are likely to support the recently proposed changes to the Dodd-Frank Act whistleblower program, which will provide the SEC with the discretion to adjust small awards upward and “exceedingly large” awards downward. The proposal came in a year when the SEC issued its highest ever whistleblower award of US$83m, shared between three people. Read more...
Remaining Dodd-Frank compensation disclosure rules:
The SEC is working on Dodd-Frank Act-mandated rules (originally proposed in 2015) that would require U.S.-listed companies to disclose whether directors, officers and other employees are permitted to hedge or offset any decrease in the market value of equity securities granted by the company as compensation, or held by such employees or directors. Read more...
Following such rulemaking, the SEC staff has indicated that it will be working on the compensation clawback and pay vs performance disclosure rules that are also mandated by the Dodd-Frank Act.
Revised resource extraction payment rule:
The SEC staff has indicated that it is working on a revised version of the resource extraction payments disclosure rule, which would require SEC-reporting companies engaged in the commercial development of oil, natural gas or minerals to disclose payments made to a government for the purpose of the commercial development of oil, natural gas or minerals. Although a version of the rule was nullified by Congress in 2017, the Dodd-Frank Act provision that requires the SEC to issue the rule is still in force.
Focus on cybersecurity, Brexit disclosures:
At several conferences, the SEC staff has indicated that it will continue to focus on companies’ cybersecurity disclosure. The staff will also be looking for more specific Brexit disclosure, where appropriate, as the March 2019 deadline gets closer.