SEC Releases

Summary - The SEC adopted amendments to its ethics rules to strengthen and modernize its ethics compliance program. The SEC indicates that the “amendments update the SEC’s existing, robust ethics requirements that govern the securities holdings and transactions of all agency employees, their spouses, and minor children. The rule was adopted jointly with the Office of Government Ethics.” The amendments update the SEC’s Supplemental Ethics Rules, 5 CFR Part 4401.102, Supplemental Standards of Conduct for Members and Employees Securities and Exchange Commission.

While the SEC has long prohibited employees from investing in stocks of entities directly regulated by the agency, such as broker-dealers and investment advisers, the rule amendments expand the prohibited holdings restrictions to ban employees from investing in financial industry sector funds, as employee ownership of financial industry sector funds poses similar risks of conflicts of interest and appearance concerns

The amendments permit employees to comply with existing reporting requirements by authorizing financial institutions to transmit data on their covered securities transactions and holdings directly to the SEC through an automated electronic system. This amendment is expected to enhance internal compliance controls by:

Facilitating the detection and remediation of violations in real time;
Reducing burdensome manual processes for transaction confirmations and reporting; and
Providing an independently verifiable source for compliance monitoring and testing.

The amendments also facilitate the efficient and effective use of agency resources to monitor compliance of securities investments and transactions that involve significant ethics risks. Specifically, because diversified mutual funds generally pose a low risk of conflicts of interest, misuse of nonpublic information for personal gain, or appearance problems as compared to other types of securities, the rule amendments exempt diversified mutual funds from the Supplemental Ethics Rule’s requirements. However, mutual funds that concentrate investments in a particular sector, industry, business, state, or country other than the United States remain subject to the rules.

For more information, click here.

Release No. 33-11275: The Enhancement and Standardization of Climate-Related Disclosures for Investors

Summary - The SEC adopted rules to “enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.” Specifically, the new rules will require a registrant to disclose:

Climate-related risks that have had or are reasonably likely to have a material impact on the registrant’s business strategy, results of operations, or financial condition;
The actual and potential material impacts of any identified climate-related risks on the registrant’s strategy, business model, and outlook;
If, as part of its strategy, a registrant has undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities;
Specified disclosures regarding a registrant’s activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices;
Any oversight by the board of directors of climate-related risks and any role by management in assessing and managing the registrant’s material climate-related risks;
Any processes the registrant has for identifying, assessing, and managing material climate-related risks and, if the registrant is managing those risks, whether and how any such processes are integrated into the registrant’s overall risk management system or processes;
Information about a registrant’s climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect the registrant’s business, results of operations, or financial condition. Disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal;
For large accelerated filers (LAFs) and accelerated filers (AFs) that are not otherwise exempted, information about material Scope 1 emissions and/or Scope 2 emissions;
For those required to disclose Scope 1 and/or Scope 2 emissions, an assurance report at the limited assurance level, which, for an LAF, following an additional transition period, will be at the reasonable assurance level;
The capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds, disclosed in a note to the financial statements;
The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates (RECs) if used as a material component of a registrant’s plans to achieve its disclosed climate-related targets or goals, disclosed in a note to the financial statements; and
If the estimates and assumptions a registrant uses to produce the financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted, disclosed in a note to the financial statements.

The final rules will become effective 60 days following publication of the adopting release in the Federal Register, and compliance dates for the rules will be phased in for all registrants, with the compliance date dependent on the registrant’s filer status.

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Release No. 34-98959: Clearing Agency Governance and Conflicts of Interest

Summary -The SEC has adopted Securities Act Rule 192 to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest. It prohibits a securitization participant, for a specified period of time, from engaging, directly or indirectly, in any transaction that would involve or result in any material conflict of interest between the securitization participant and an investor in the relevant ABS. Under new Rule 192, such transactions would be “conflicted transactions.”

Rule 192 provides exceptions for risk-mitigating hedging activities, liquidity commitments, and bona fide market-making activities of a securitization participant. These exceptions permit certain market activities, subject to satisfaction of the specified conditions, which will allow securitization participants to continue important risk management, liquidity commitment, and market-making activities.

Under new Rule 192, conflicted transactions include a short sale of the relevant ABS, the purchase of a credit default swap or other credit derivative that entitles the securitization participant to receive payments upon the occurrence of specified credit events in respect of the ABS, or a transaction that is substantially the economic equivalent of the aforementioned transactions, other than any transaction that only hedges general interest rate or currency exchange risk.

Effective date: February 5, 2024. Compliance date: The applicable compliance dates are discussed in Part III of this release.

For more information, click here.

Release No. 34-98737: Reporting of Securities Loans

Summary - RNSAs are required to publicly report information within 90 calendar days of the reporting date.

For more information, click here.

Release No. 33-11216: Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure

Summary - The SEC adopted rules requiring registrants to disclose material cybersecurity incidents they experience and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance. The SEC also adopted rules requiring foreign private issuers to make comparable disclosures.

The SEC indicates that the “new rules will require registrants to disclose on the new Item 1.05 of Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant.” Generally, an Item 1.05 Form 8-K will due four business days after a registrant determines that a cybersecurity incident is material. The disclosure may be delayed if the United States Attorney General determines that immediate disclosure would pose a substantial risk to national security or public safety and notifies the SEC of such determination in writing.

The new rules also add Regulation S-K Item 106, which will require registrants to describe their processes, if any, for assessing, identifying, and managing material risks from cybersecurity threats, as well as the material effects or reasonably likely material effects of risks from cybersecurity threats and previous cybersecurity incidents. Item 106 will also require registrants to describe the board of directors’ oversight of risks from cybersecurity threats and management’s role and expertise in assessing and managing material risks from cybersecurity threats. These disclosures will be required in a registrant's annual report on Form 10-K.

The rules require comparable disclosures by foreign private issuers on Form 6-K for material cybersecurity incidents and on Form 20-F for cybersecurity risk management, strategy, and governance.

The final rules will become effective 30 days following publication of the adopting release in the Federal Register. The Form 10-K and Form 20-F disclosures will be due beginning with annual reports for fiscal years ending on or after December 15, 2023. The Form 8-K and Form 6-K disclosures will be due beginning the later of 90 days after the date of publication in the Federal Register or December 18, 2023. Smaller reporting companies will have an additional 180 days before they must begin providing the Form 8-K disclosure. With respect to compliance with the structured data requirements, all registrants must tag disclosures required under the final rules in Inline XBRL beginning one year after initial compliance with the related disclosure requirement.

For more information, click here.

Release No. 34-97877: Daily Computation of Customer and Broker-Dealer Reserve Requirements under the Broker-Dealer Customer Protection Rule

Summary -The SEC proposed amendments to Rule 15c3-3 (Customer Protection Rule) to require certain broker-dealers to increase the frequency with which they perform computations of the net cash they owe to customers and other broker-dealers (known as PAB account holders) from weekly to daily. Net cash owed to customers and PAB account holders must be held in a special reserve bank account.

The SEC indicates that broker-dealers occasionally may have substantial deposit requirements as a result of customer and PAB reserve computations. The proposal would “require broker-dealers with average total credits (the amount of cash they owe customers and PAB account holders) equal to or greater than $250 million to make the computations necessary to determine the amounts required to be deposited in the customer and PAB reserve bank accounts daily, as of the close of the previous business day. By reducing the timeframe between computations, the proposal would assist broker-dealers in more dynamically matching the net amount of cash owed to customers and PAB account holders with the amount on deposit in the broker-dealer’s customer and PAB reserve bank accounts. The daily customer and PAB reserve computations would safeguard customers and PAB account holders by lessening the potential for large mismatches to build over time, thereby increasing the likelihood that they are made whole even if a broker-dealer fails.”

The public comment period will remain open for 60 days following publication of the proposing release on the SEC website or 30 days following publication of the proposing release in the Federal Register, whichever period is longer.

For more information, click here.

Release No. 34-97762: Reopening of Comment Period for Position Reporting of Large Security-Based Swap Positions

Summary -The SEC reopened the comment period for its proposed rule for position reporting of large security-based swap positions that exceed certain thresholds, and the staff of the SEC’s Division of Economic and Risk Analysis released a memorandum that provides supplemental data and analysis regarding the proposed reporting thresholds in the equity security-based swap market.

The public comment period will remain open until August 21, 2023, or until 30 days after the date of publication of the reopening release in the Federal Register, whichever is later.

For more information, click here.

Release Nos. 33-11211: Money Market Fund Reforms; Form PF Reporting Requirements for Large Liquidity Fund Advisers; Technical Amendments to Form N-CSR and Form N-1A

Summary - The SEC has adopted amendments to certain rules that govern money market funds under the Investment Company Act of 1940.

The SEC indicates that the amendments will “increase minimum liquidity requirements for money market funds to provide a more substantial liquidity buffer in the event of rapid redemptions.” The amendments also remove provisions in the current rule that permit a money market fund to suspend redemptions temporarily through a gate and allow money market funds to impose liquidity fees if their weekly liquid assets fall below a certain threshold. These changes are designed to reduce the risk of investor runs on money market funds during periods of market stress.

To address concerns about redemption costs and liquidity, the amendments will require institutional prime and institutional tax-exempt money market funds to impose liquidity fees when a fund experiences daily net redemptions that exceed 5 percent of net assets, unless the fund’s liquidity costs are de minimis. In addition, the amendments will require any non-government money market fund to impose a discretionary liquidity fee if the board determines that a fee is in the best interest of the fund. The SEC indicates that these amendments are designed to protect remaining shareholders from dilution and to more fairly allocate costs so that redeeming shareholders bear the costs of redeeming from the fund when liquidity in underlying short-term funding markets is costly.

The amendments also modify certain reporting forms that are applicable to money market funds and large private liquidity funds advisers.

The rule amendments will become effective 60 days after publication in the Federal Register with a tiered transition period for funds to comply with the amendments. The reporting form amendments will become effective June 11, 2024.

For more information, click here.

Release No. 33-11180: Reopening of Comment Period for Modernization of Beneficial Ownership Reporting

Summary -The SEC has reopened the comment period for its proposed amendments to modernize the rules governing beneficial ownership reporting, and the staff of the SEC’s Division of Economic and Risk Analysis released a memorandum that provides supplemental data and analysis related to the proposed amendments’ economic effects.

The public comment period will remain open until June 27, 2023, or until 30 days after the date of publication of the reopening release in the Federal Register, whichever is later.

For more information, click here.

Release No. 34-97309: Supplemental Information and Reopening of Comment Period for Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange”

Summary - The SEC has reopened the comment period and provided supplemental information on proposed amendments to the definition of “exchange” under Exchange Act Rule 3b-16. The SEC initially proposed the amendments in January 2022 and reopened the comment period in May 2022. The reopened comment period closed on June 13, 2022.

The SEC’s reopening release reiterated the applicability of existing rules to platforms that trade crypto asset securities, including so-called “DeFi” systems, and provides supplemental information and economic analysis for systems that would be included in the new, proposed exchange definition. The reopening release also requested information and public comment on crypto asset securities trading on such systems and certain aspects of the proposed amendments applicable to all securities.

The public comment period will remain open for 30 days after publication of the reopening release in the Federal Register

For more information, click here.

Release No. 34-97424: Share Repurchase Disclosure Modernization

Summary - The SEC adopted amendments to modernize the disclosure requirements relating to repurchases of an issuer’s equity securities, including requiring issuers to provide daily repurchase activity on a quarterly or semi-annual basis, depending on the type of issuer. The SEC indicates that the amendments will “improve disclosure and provide investors with enhanced information to assess the purposes and effects of share repurchases.”

Amendments

The amendments will require issuers to disclose daily quantitative share repurchase information either quarterly or semi-annually.

The required disclosures include, for each day on which a repurchase was conducted, the number of shares repurchased that day and the average price paid, among other things. Issuers will also be required to include a checkbox indicating whether certain officers and directors traded in the relevant securities in the four business days before or after the announcement of the repurchase plan or program.

Further, the amendments will revise and expand narrative repurchase disclosure requirements to require that an issuer disclose:

The objectives or rationales for its share repurchases and the process or criteria used to determine the amount of repurchases; and
Any policies and procedures relating to purchases and sales of the issuer’s securities during a repurchase program by its officers and directors, including any restriction on such transactions.

In addition, the amendments will add a new item to Regulation S-K to better allow investors, the SEC, and other market participants to observe how issuers use Rule 10b5-1 plans. New Item 408(d) will require quarterly disclosure in periodic reports on Forms 10-Q and 10-K about an issuer’s adoption and termination of Rule 10b5-1 trading arrangements.

Effective Date

Foreign private issuers that file on foreign private issuer forms will disclose the quantitative data in new Form F-SR beginning with the Form F-SR that covers the first full fiscal quarter that begins on or after April 1, 2024, and provide the narrative disclosure starting in the first Form 20-F filed after their first Form F-SR has been filed. Registered closed-end management investment companies that are exchange traded will disclose the quantitative data and provide the narrative disclosure on Form N-CSR beginning with the Form N-CSR that covers the first six-month period that begins on or after January 1, 2024. All other issuers will be required to include the quantitative data as an exhibit to their Forms 10-Q and 10-K and provide the narrative disclosure in their Forms 10-Q and 10-K beginning with the first filing that covers the first full fiscal quarter that begins on or after October 1, 2023.

For more information, click here.

Release No. IA-6297: Amendments to Form PF to Require Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers and to Amend Reporting Requirements for Large Private Equity Fund Advisers

Summary - The SEC adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds. The amendments are designed to enhance the ability of the Financial Stability Oversight Council (FSOC) to assess systemic risk and to bolster the SEC’s oversight of private fund advisers and its investor protection efforts. The SEC indicates that the amendments will “require large hedge fund advisers and all private equity fund advisers to file current reports upon the occurrence of certain reporting events that could indicate significant stress at a fund or investor harm.” Reporting events for large hedge fund advisers include certain:

Extraordinary investment losses;
Significant margin and default events;
Terminations or material restrictions of prime broker relationships;
Operations events; and
Events associated with withdrawals and redemptions.

Large hedge fund advisers must file these reports as soon as practicable, but not later than 72 hours from the occurrence of the relevant event. Reporting events for private equity fund advisers include the removal of a general partner, certain fund termination events, and the occurrence of an adviser-led secondary transaction. Private equity fund advisers must file these reports on a quarterly basis within 60 days of the fiscal quarter end.

The amendments will also require large private equity fund advisers to report information on general partner and limited partner clawbacks on an annual basis as well as additional information on their strategies and borrowings as a part of their annual filing.

The amendments for current reporting will become effective six months after publication of the adopting release in the Federal Register, and the remaining amendments will become effective one year after publication in the Federal Register

For more information, click here.

Release No. 34-97143: Regulation Systems Compliance and Integrity

Summary - The SEC is proposing amendments to Regulation Systems Compliance and Integrity (Regulation SCI) under the Securities Exchange Act of 1934 (Exchange Act). The proposed amendments would expand the definition of “SCI entity” to include a broader range of key market participants in the U.S. securities market infrastructure, and update certain provisions of Regulation SCI to take account of developments in the technology landscape of the markets since the adoption of Regulation SCI in 2014.

Comments on the proposal are due 60 days after publication in the Federal Register.

For more information, click here.

Release No. 34-97141: Regulation S-P - Privacy of Consumer Financial Information and Safeguarding Customer Information

Summary - The SEC is proposing rule amendments that would require brokers and dealers (or “broker-dealers”), investment companies, and investment advisers registered with the SEC (“registered investment advisers”) to adopt written policies and procedures for incident response programs to address unauthorized access to or use of customer information, including procedures for providing timely notification to individuals affected by an incident involving sensitive customer information with details about the incident and information designed to help affected individuals respond appropriately.

The SEC also is proposing to broaden the scope of information covered by amending requirements for safeguarding customer records and information, and for properly disposing of consumer report information. In addition, the proposed amendments would extend the application of the safeguards provisions to transfer agents. The proposed amendments would also include requirements to maintain written records documenting compliance with the proposed amended rules. Finally, the proposed amendments would conform annual privacy notice delivery provisions to the terms of an exception provided by a statutory amendment to the Gramm-Leach-Bliley Act.

Comments on the proposal are due 60 days after publication in the Federal Register.

For more information, click here.

Release No. 33-11167: Reopening of Comment Period for “Cybersecurity Risk Management for Investment Advisers, Registered Investment Companies, and Business Development Companies"

Summary - The SEC has reopened the comment period on proposed rules and amendments related to cybersecurity risk management and cybersecurity-related disclosure for registered investment advisers, registered investment companies, and business development companies that were proposed by the SEC on February 9, 2022.

The SEC indicates that the “reopened comment period will allow interested persons additional time to analyze the issues and prepare comments in light of other regulatory developments, including whether there would be any effects of other Commission proposals related to cybersecurity risk management and disclosure that the Commission should consider.”

The comment period will remain open until 60 days after the date of publication of the reopening release in the Federal Register

For more information, click here.

Release No. 34-97142: Cybersecurity Risk Management Rule for Broker-Dealers, Clearing Agencies, Major Security-Based Swap Participants, the Municipal Securities Rulemaking Board, National Securities Associations, National Securities Exchanges, Security-Based Swap Data Repositories, Security-Based Swap Dealers, and Transfer Agents

Summary - The SEC has proposed for public comment proposed requirements for broker-dealers, clearing agencies, major security-based swap participants, the Municipal Securities Rulemaking Board, national securities associations, national securities exchanges, security-based swap data repositories, security-based swap dealers, and transfer agents (collectively, “Market Entities”) to address their cybersecurity risks.

The proposal would require all Market Entities to implement policies and procedures that are reasonably designed to address their cybersecurity risks and, at least annually, review and assess the design and effectiveness of their cybersecurity policies and procedures, including whether they reflect changes in cybersecurity risk over the time period covered by the review. The proposal, through new notification requirements applicable to all Market Entities and additional reporting requirements applicable to Market Entities other than certain types of small broker-dealers (collectively, “Covered Entities”), would improve the SEC’s ability to obtain information about significant cybersecurity incidents affecting these entities. Further, new public disclosure requirements for Covered Entities would improve transparency about the cybersecurity risks that can cause adverse impacts to the U.S. securities markets.

The public comment period will remain open until 60 days after the date of publication of the proposing release in the Federal Register.

For more information, click here.

Release No. 34-96906: The Commission’s Privacy Act Regulations

Summary - The SEC has proposed for public comment a rule that would revise the agency’s regulations under the Privacy Act. The SEC indicates that the “Privacy Act is the principal law governing the handling of personal information in the federal government.” The current rules provide procedures for making Privacy Act requests, including requests for access to and amendment of records pertaining to the individual making the request. The revisions will clarify, update, and streamline the language of several procedural provisions.

The proposed revisions would codify current practices for processing requests made by the public under the Privacy Act. This would provide greater clarity regarding the SEC’s process for how individuals can access information pertaining to themselves. Due to the scope of the revisions, the proposed rule would replace the SEC’s current Privacy Act regulations in their entirety.

If adopted, the proposed rule would revise procedural and fee provisions, as well as eliminate unnecessary provisions. The proposed rule would also allow for electronic methods to verify one’s identity and to submit Privacy Act requests.

The public comment period will remain open until April 17, 2023, or until 30 days following publication of the proposing release in the Federal Register, whichever is later.

For more information, click here.

Release No. 33-11159: Extending Form 144 EDGAR Filing Hours

Summary - The SEC announced that it has amended Regulation S-T to extend the filing deadline for Forms 144 filed electronically from 5:30 p.m. to 10:00 p.m., Eastern Standard Time or Eastern Daylight Saving Time, whichever is currently in effect, on SEC business days. The SEC also issued technical amendments to enhance the consistency of recently revised provisions related to the filing format of Form 144. The new filing deadline and other amendments are effective on March 20, 2023, and the Form 144 electronic filing requirement will begin on April 13, 2023.

In addition, as of April 13, 2023, the SEC’s Division of Corporation Finance’s Statement Regarding Requirements for Form 144 Paper Filings in Light of COVID-19 Concerns (June 25, 2020) will no longer be in effect and Forms 144 will no longer be accepted via email. After that time, Forms 144 that relate to the sale of securities of issuers not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act must be filed in paper.

For more information, click here.

Release No. 34-96930: Shortening the Securities Transaction Settlement Cycle

Summary - The SEC adopted rule changes to shorten the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one (T+1). The SEC indicates that the “final rule is designed to benefit investors and reduce the credit, market, and liquidity risks in securities transactions faced by market participants.”

In addition to shortening the standard settlement cycle, the final rules will improve the processing of institutional trades. Specifically, the final rules will require a broker-dealer to either enter into written agreements or establish, maintain, and enforce written policies and procedures reasonably designed to ensure the completion of allocations, confirmations, and affirmations as soon as technologically practicable and no later than the end of trade date. The final rules also require registered investment advisers to make and keep records of the allocations, confirmations, and affirmations for certain securities transactions.

Further, the final rules add a new requirement to facilitate straight-through processing, which applies to certain types of clearing agencies that provide central matching services. The final rules will require central matching service providers to establish, implement, maintain, and enforce new policies and procedures reasonably designed to facilitate straight-through processing and require them to submit an annual report to the SEC that describes and quantifies progress with respect to straight-through processing.

The final rules will become effective 60 days after publication in the Federal Register. The compliance date for the final rules is May 28, 2024.

For more information, click here.

Release No. 34-96768: Supplemental Standards of Ethical Conduct for Members and Employees of the Securities and Exchange Commission

Summary - The SEC has proposed for public comment amendments to its ethics rules to strengthen and modernize its ethics compliance program. The amendments would add new requirements and prohibitions to the program, which already includes some of the most stringent ethics requirements in the executive branch for all agency employees, their spouses, and minor children.

The SEC indicates that current rules require agency employees to preclear securities transactions and comply with minimum holding periods. All employees are prohibited from, among other things, transacting in securities of companies the agency is investigating, engaging in short selling, transacting in derivatives, participating in initial public offerings for seven calendar days, or purchasing or carrying securities on margin.

The amendments, which are being proposed jointly with the Office of Government Ethics, would:

Expand the existing prohibited holdings restrictions to ban employees from investing in financial industry sector funds;
Authorize the SEC to collect data on employees’ covered securities transactions and holdings directly from financial institutions through an automated electronic system; and
Exempt diversified mutual funds from the Supplemental Ethics Rule’s requirements, given that they generally pose a low risk of conflicts of interest, misuse of nonpublic information for personal gain, or appearance problems. Mutual funds that concentrate investments in a particular sector, industry, business, state, or country other than the United States would remain subject to the rules.

For more information, click here.

Release No. 33-11151: Prohibition Against Conflicts of Interest in Certain Securitizations

Summary - The SEC has proposed for public comment a rule to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest. Specifically, the rule would prohibit securitization participants from engaging in certain transactions that could incentivize a securitization participant to structure an ABS in a way that would put the securitization participant's interests ahead of those of ABS investors. The SEC originally proposed a rule to implement Section 27B in September 2011.

If adopted, new Securities Act Rule 192 would prohibit an underwriter, placement agent, initial purchaser, or sponsor of an ABS, including affiliates or subsidiaries of those entities, from engaging, directly or indirectly, in any transaction that would involve or result in any material conflict of interest between the securitization participant and an investor in such ABS. Under the proposed rule, such transactions would be “conflicted transactions.” They include, for example, a short sale of the ABS or the purchase of a credit default swap or other credit derivative that entitles the securitization participant to receive payments upon the occurrence of specified credit events in respect of the ABS. The prohibition on conflicted transactions would commence on the date on which a person has reached, or has taken substantial steps to reach, an agreement that such person will become a securitization participant with respect to an ABS, and it would end one year after the date of the first closing of the sale of the relevant ABS.

The public comment period will remain open for 60 days following publication of the proposing release on the SEC's website or 30 days following publication of the proposing release in the Federal Register, whichever period is longer.

For more information, click here.

Release No. 34-96458: Reopening of Comment Period for Share Repurchase Disclosure Modernization

Summary - he SEC reopened the comment period on proposed amendments intended to modernize and improve the disclosure required about an issuer’s repurchases of its equity securities, often referred to as buybacks.

The SEC indicates it “is reopening the comment period because, after the proposed amendments were published for public comment, The Inflation Reduction Act of 2022 was enacted. The law imposes upon certain corporations a non-deductible excise tax equal to one percent of the fair market value of any stock of the corporation repurchased by such corporation during the taxable year. As a result, the Commission staff has prepared a memorandum that discusses potential economic effects of the new excise tax that may be helpful in evaluating the proposed amendments.”

The amendments were initially proposed by the SEC in December 2021, and the comment period for the proposal was reopened in October 2022. The staff memorandum is available for review as part of the public comment file. The public comment period will remain open for 30 days after publication in the Federal Register.

For more information, click here.

Release No. 34-96496: Regulation Best Execution

Summary - The SEC has proposed for public comment Regulation Best Execution, which would establish through Commission rules a best execution regulatory framework for brokers, dealers, government securities brokers, government securities dealers, and municipal securities dealers. While a best execution rule was first established in 1968 by the National Association of Securities Dealers, Inc., the predecessor to the Financial Industry Regulatory Authority, Inc., the proposed rule, if adopted, would create the first SEC-established rule concerning best execution.

Proposed Regulation Best Execution would require broker-dealers to establish, maintain, and enforce written policies and procedures reasonably designed to comply with the proposed best execution standard. Further, the proposal would require these policies and procedures to address how broker-dealers will comply with the best execution standard and how they will determine the best market and make routing or execution decisions for customer orders.

The public comment period will remain open until March 31, 2023, or until 60 days after the date of publication of the proposing release in the Federal Register, whichever is later.

For more information, click here.

Release No. 34-96493: Disclosure of Order Execution Information

Summary - The SEC has proposed for public comment amendments that would update the disclosure required under Rule 605 of Regulation NMS for order executions in national market system stocks, which are stocks listed on a national securities exchange. The SEC indicates that Rule 605 was adopted in 2000 and provides visibility into execution quality at different market centers. It has not been substantively updated since it was adopted.

The proposed amendments would expand the scope of entities subject to Rule 605, modify the information required to be reported under the rule, and change how orders are categorized for the purposes of the rule. Among other things, the proposal would:

Expand the scope of entities that must produce monthly execution quality reports to include broker-dealers with a larger number of customers.
Modify the definition of “covered order” to include certain orders submitted outside of regular trading hours and certain orders submitted with stop prices. The proposed amendments would capture more relevant execution quality information for these orders by requiring statistics to be reported from the time such orders become “executable.”

The proposed amendments to how orders are categorized would require the reporting of execution quality information for fractional share orders, odd-lot orders, and larger-sized orders. Further, the proposal would require that the time of order receipt and time of order execution be measured in increments of a millisecond or finer and that realized spread be calculated at both 15 seconds and one minute. The proposal would also require new statistical measures of execution quality, such as average effective over quoted spread (a percentage-based metric that represents how much price improvement orders received) and a size improvement benchmark. Finally, the proposal would enhance the accessibility of the required reports by requiring all entities subject to the rule to make a summary report available to the public.

The public comment period will remain open until March 31, 2023, or until 60 days after the date of publication of the proposing release in the Federal Register, whichever is later.

For more information, click here.

Release No. 34-96495: Order Competition Rule

Summary - The SEC has proposed for public comment a rule that would require certain orders of individual investors to be exposed to competition in fair and open auctions before such orders could be executed internally by any trading center that restricts order-by-order competition.

If adopted, the proposed rule generally would prohibit a “restricted competition trading center” such as a wholesaler from internally executing “segmented orders” – orders for NMS stocks that are made for an account of a natural person or an account held in legal form on behalf of a natural person or group of related family members and in which the average daily number of trades executed in NMS stocks was less than 40 in each of the six preceding calendar months – unless the orders are first exposed to competition in a “qualified auction” operated by an “open competition trading center.” The proposed rule would also include limited exceptions to this general prohibition, such as for orders executed at a very favorable price for the individual investor.

The public comment period will remain open until March 31, 2023, or until 60 days following publication of the proposing release in the Federal Register, whichever is later.

For more information, click here.

Release No. 34-96494: Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders

Summary - The SEC has proposed for public comment proposed amendments to certain rules under Regulation NMS to adopt variable minimum pricing increments, or “tick sizes,” for the quoting and trading of NMS stocks, reduce access fee caps for protected quotations, and accelerate the transparency of the best priced orders available in the market. The proposed amendments are designed to enhance trading opportunities for all investors and to help ensure that orders placed in the national market system reflect the best prices available for all investors.

Specifically, the Commission proposed to amend Rule 612 of Regulation NMS to establish variable minimum pricing increments for quotations and orders in NMS stocks that are priced at, or greater than, $1.00 per share based on objective and measurable criteria and make such minimum pricing increments applicable to the trading of all NMS stocks regardless of price, subject to certain specified exceptions. Under the proposal, the primary listing exchanges would measure and calculate the Time Weighted Average Quoted Spread for the relevant NMS stock and determine the applicable minimum pricing increment.

The public comment period will remain open until March 31, 2023, or until 60 days following publication of the proposing release in the Federal Register, whichever is later.

For more information, click here.

Release No. 33-11139: Technical Amendments to Commission Rules

Summary - The SEC has issued Final Rule, Technical Amendments to Commission Rules. This final rule includes technical amendments to the Code of Federal Regulations (CFR). Specifically, this rule amends part 200 of 17 CFR in order to conform with current Federal Register requirements of structuring statutory authority citations within the CFR. The technical amendments move the citations of statutory authority for part 200 of 17 CFR from the subpart level to the part level and amend related citations to remove duplicative statutory citations at the subpart level.

These amendments are effective December 21, 2022.

For more information, click here.

Release No. 33-11140: Adoption of Updated EDGAR Filer Manual

Summary - The SEC has published Final Rule, Adoption of Updated EDGAR Filer Manual. This final rule adopts amendments to Volumes I and II of the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) Filer Manual and related rules and forms.

This final rule is effective upon publication in the Federal Register.

For more information, click here.

Release No. 33-11138: Insider Trading Arrangements and Related Disclosures

Summary - The SEC adopted amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 (Exchange Act) and new disclosure requirements to enhance investor protections against insider trading. The amendments include updates to Rule 10b5-1(c)(1), which provides an affirmative defense to insider trading liability under Section 10(b) and Rule 10b-5. Collectively, the SEC indicates that the “final rules aim to strengthen investor protections concerning insider trading and to help shareholders understand when and how insiders are trading in securities for which they may at times have material nonpublic information.”

The changes to the rule:

Update the conditions that must be met for the 10b5-1 affirmative defense. Specifically, the amendments adopt cooling-off periods for persons other than issuers before trading can commence under a Rule 10b5-1 plan.
Condition that all persons entering into a Rule 10b5-1 plan must act in good faith with respect to the plan.
Provide that directors and officers must include representations in their plans certifying at the time of the adoption of a new or modified Rule 10b5-1 plan that: (1) they are not aware of any material nonpublic information about the issuer or its securities; and (2) they are adopting the plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5.
Restrict the use of multiple overlapping trading plans and limit the ability to rely on the affirmative defense for a single-trade plan to one single-trade plan per twelve-month period for all persons other than issuers.
Require more comprehensive disclosure about issuers’ policies and procedures related to insider trading, including quarterly disclosure by issuers regarding the use of Rule 10b5-1 plans and certain other trading arrangements by its directors and officers for the trading of its securities.
Require disclosure of issuers’ policies and practices around the timing of options grants and the release of material nonpublic information.
Require that issuers report on a new table any option awards beginning four business days before the filing of a periodic report or the filing or furnishing of a current report on Form 8-K that discloses material nonpublic information, including earnings information, other than a Form 8-K that discloses a material new option award grant under Item 5.02(e), and ending one business day after a triggering event.
Require that insiders that report on Forms 4 or 5 indicate by checkbox that a reported transaction was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and to disclose the date of adoption of the trading plan.
Require that bona fide gifts of securities that were previously permitted to be reported on Form 5 be reported on Form 4.

The final rules will become effective 60 days following publication of the adopting release in the Federal Register. Section 16 reporting persons will be required to comply with the amendments to Forms 4 and 5 for beneficial ownership reports filed on or after April 1, 2023. Issuers will be required to comply with the new disclosure requirements in Exchange Act periodic reports on Forms 10-Q, 10-K and 20-F and in any proxy or information statements in the first filing that covers the first full fiscal period that begins on or after April 1, 2023. The final amendments defer by six months the date of compliance with the additional disclosure requirements for smaller reporting companies.

For more information, click here.

Release No. 33-11117: Resubmission of Comments and Reopening of Comment Periods for Several Rulemaking Releases Due to a Technological Error in Receiving Certain Comments

Summary - The SEC has reopened the public comment periods for 11 rulemaking releases and one request for comment due to a technological error that resulted in a number of public comments submitted through the SEC’s internet comment form not being received by the agency. The majority of the affected comments were submitted in August 2022; however, the technological error is known to have occurred as early as June 2021.

The SEC indicates that, “to ensure that interested persons, including any affected commenters, have the opportunity to comment on the affected releases or to resubmit comments, the Commission is reopening the comment periods for the affected releases until 14 days following publication of the reopening release in the Federal Register. As further described in the reopening release, all commenters who submitted a public comment to one of the affected comment files through the internet comment form between June 2021 and August 2022 are advised to check the relevant comment file on SEC.gov to determine whether their comment was received and posted. If a comment has not been posted, commenters should resubmit that comment.”

The press release noted below details all the proposals being reopened for public comment, which include the following:

Reporting of Securities Loans, Release No. 34-93613 (December 2021);
Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition against Undue
Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions, Release No. 34-93784 (February 2022);
Share Repurchase Disclosure Modernization, Release Nos. 34-93783, IC-34440 (February 2022);
Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, Release Nos. 33-11038, 34-94382, IC-34529 (March 2022);
The Enhancement and Standardization of Climate-Related Disclosures for Investors, Release Nos. 33-11042, 34-94478 (April 2022);
Special Purpose Acquisition Companies, Shell Companies, and Projections, Release Nos. 33-11048, 34-94546, IC-34549 (May 2022); and
Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Governance Investment Practices, Release Nos. 33-11068, 34-94985, IA-6034, IC-34594 (June 2022)

For more information, click here.

Release No. 33-11131: Enhanced Reporting of Proxy Votes by Registered Management Investment Companies; Reporting of Executive Compensation Votes by Institutional Investment Managers

Summary - The SEC adopted amendments to Form N-PX to enhance the information mutual funds, exchange-traded funds, and certain other registered funds report about their proxy votes. The SEC indicates that the “amendments will make these funds’ proxy voting records more usable and easier to analyze, improving investors’ ability to monitor how their funds vote and compare different funds’ voting records. The rulemaking will also newly require institutional investment managers to disclose how they voted on executive compensation, or so-called ‘say-on-pay’ matters, which fulfills one of the remaining rulemaking mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

To enhance proxy vote reporting, the amendments adopted by the SEC will require funds and managers to categorize each matter by type and, where a form of proxy or “proxy card” subject to the SEC’s proxy rules is available, tie the description and order of voting matters to the issuer’s form of proxy to help investors identify votes of interest and compare voting records. The changes also prescribe how funds and managers must organize their reports and require them to use a structured data language to make the filings easier to analyze. Funds and managers will also be required to disclose the number of shares that were voted or instructed to be voted, as well as the number of shares loaned and not recalled and thus not voted. This latter requirement is designed to provide shareholders with context to understand how securities lending activities could affect a fund’s or manager’s proxy voting practices.

The new rules and form amendments will be effective for votes occurring on or after July 1, 2023, with the first filings subject to the amendments due in 2024.

For more information, click here.

Release No. 33-11125: Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements

Summary - The SEC adopted rule and form amendments to require mutual funds and exchange-traded funds to transmit concise and visually engaging shareholder reports and to promote transparent and balanced presentations of fees and expenses in investment company advertisements.

Fund Shareholder Reports Amendments

The SEC adopted rule amendments will require funds to provide concise, tailored shareholder reports that highlight key information, such as fund expenses, performance, and portfolio holdings. The SEC indicates that the instructions for the revamped reports will “encourage the use of graphic and text features to make them more effective. Funds will be required to tag the information in their reports in a structured data format.”

In addition, the rule amendments require funds to make certain information that may be more relevant to investors and financial professionals who desire more in-depth information available online and available for delivery free of charge to investors on request. That information will no longer appear in fund’s shareholder reports but will remain available to investors on a website identified in the shareholder report and must be filed semi-annually with the SEC.

Investment Company Advertising Rules

The SEC adopted amendments to investment company advertising rules to require that fee and expense presentations in registered investment company and business development company advertisements and sales literature be consistent with relevant prospectus fee table presentations and be reasonably current. The amendments also address representations of fees and expenses that could be materially misleading.

The amendments will become effective 60 days after publication in the Federal Register. The SEC is providing an 18-month transition period after the effective date of the amendments to allow mutual funds and exchange-traded funds with adequate time to adjust their shareholder report and transmission practices. The SEC is also providing an 18-month transition period after the effective date to comply with the final amendments to the advertising rules. The rule amendments that address representations of fees and expenses that could be materially misleading will apply on the effective date.

For more information, click here.

Release No. 33-11126: Listing Standards for Recovery of Erroneously Awarded Compensation

Summary - The SEC adopted rules to require securities exchanges to adopt listing standards that require issuers to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers. The SEC indicates that the final rules require a listed issuer to file the policy as an exhibit to its annual report and to include disclosures related to its recovery policy and recovery analysis where a recovery is triggered.

Erroneously Awarded Incentive-Based Compensation

The new rules implement Section 10D of the Securities Exchange Act of 1934, a provision added by the Dodd-Frank Wall Street Reform and Consumer Protection Act. New Exchange Act Rule 10D-1 directs national securities exchanges and associations to establish listing standards that require a listed issuer to adopt and comply with a written policy for recovery of erroneously awarded incentive-based compensation received by its current or former executive officers in the event it is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the securities laws, during the three completed fiscal years immediately preceding the date that the issuer is required to prepare an accounting restatement.

Rule 10D-1 also directs national securities exchanges and associations to establish listing standards that require the issuer to disclose those compensation recovery policies in accordance with SEC rules, including providing the information in tagged data format.

Disclosures on Recovery of Incentive-Based Compensation

The SEC also adopted final rules that require specific disclosure of the listed issuer’s policy on recovery of incentive-based compensation and information about actions taken pursuant to such recovery policy. The amendments also require all listed issuers to:

File their written recovery policies as exhibits to their annual reports;
Indicate by check boxes on their annual reports whether the financial statements included in the filings reflect correction of an error to previously issued financial statements and whether any of those error corrections are restatements that required a recovery analysis; and
Disclose any actions they have taken pursuant to such recovery policies.

The final rules will become effective 60 days following publication of the adopting release in the Federal Register. Exchanges will be required to file proposed listing standards no later than 90 days following publication of the release in the Federal Register, and the listing standards must be effective no later than one year following such publication. Issuers subject to such listing standards will be required to adopt a recovery policy no later than 60 days following the date on which the applicable listing standards become effective.

For more information, click here.

Release No. 34-95763: Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule With Respect to U.S. Treasury Securities

Summary - The SEC has issued for public comment proposed rule changes that would enhance risk management practices for central counterparties in the U.S. Treasury market and facilitate additional clearing of U.S. Treasury securities transactions. The proposed rule changes would update the membership standards required of covered clearing agencies for the U.S. Treasury market with respect to a member’s clearance and settlement of specified secondary market transactions. Additional proposed rule changes are designed to reduce the risks faced by a clearing agency and incentivize and facilitate additional central clearing in the U.S. Treasury market.

If adopted as proposed, the proposal would require that clearing agencies in the U.S. Treasury market adopt policies and procedures designed to require their members to submit for clearing certain specified secondary market transactions.

These transactions would include all:

Repurchase and reverse repurchase agreements collateralized by U.S. Treasury securities entered into by a member of the clearing agency;
Purchase and sale transactions entered into by a member of the clearing agency that is an interdealer broker; and
Purchase and sale transactions entered into between a clearing agency member and either a registered broker-dealer, a government securities broker, a government securities dealer, a hedge fund, or a particular type of leveraged account.

With respect to customer margin, the proposal would permit broker-dealers to include margin required and on deposit at a clearing agency in the U.S. Treasury market as a debit in the customer reserve formula, subject to certain conditions. In addition, the proposal would require clearing agencies in this market to collect and calculate margin for house and customer transactions separately. Finally, the proposal would require policies and procedures designed to ensure that the clearing agency has appropriate means to facilitate access to clearing, including for indirect participants. The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.

For more information, click here.

Release No. 34-96034: Electronic Recordkeeping Requirements for Broker-Dealers, Security-Based Swap Dealers, and Major Security-Based Swap Participants

Summary - The SEC adopted amendments to the electronic recordkeeping, prompt production of records, and third-party recordkeeping service requirements applicable to broker-dealers, security-based swap dealers (SBSDs), and major security-based swap participants (MSBSPs). The SEC indicates that the “amendments are designed to modernize recordkeeping requirements given technological changes over the last two decades and to make the rule adaptable to new technologies in electronic recordkeeping. The amendments will also facilitate examinations of broker-dealers, SBSDs, and MSBSPs.”

The SEC’s broker-dealer electronic recordkeeping rule currently requires firms to preserve electronic records exclusively in a non-rewriteable, non-erasable format, known as the write once, read many format. The amendments add an audit-trail alternative under which electronic records can be preserved in a manner that permits the recreation of an original record if it is altered, over-written, or erased. The audit-trail alternative is designed to provide broker-dealers with greater flexibility in configuring their electronic recordkeeping systems so they more closely align with current electronic recordkeeping practices while also protecting the authenticity and reliability of original records. The amendments apply the same requirements to nonbank SBSDs and MSBSPs.

Among other things, to facilitate examinations and make them more efficient, the amendments also require broker-dealers and all types of SBSDs and MSBSPs to produce electronic records to securities regulators in a reasonably usable electronic format.

The final amendments will become effective 60 days after publication in the Federal Register. The compliance dates for the new requirements will be six months after publication in the Federal Register in the case of broker-dealers and 12 months after publication in the Federal Register in the case of SBSDs and MSBSPs.

For more information, click here.

Release No. 33-11101: Adoption of Updated EDGAR Filer Manual

Summary - The SEC has published a Final Rule, Adoption of Updated EDGAR Filer Manual. This new edition of the EDGAR Filer Manual has been updated to reflect recent SEC rulemaking, including changes to reflect amendments to rules to require the filing of certain applications, confidential treatment requests and forms from paper to electronic submission. The amended rules also require institutional investment managers to file confidential treatment requests for filings made under section 13(f) of the Securities Exchange Act of 1934 electronically on EDGAR.

For more information, click here.

Release No. 33-11098: Inflation Adjustments under Titles I and III of the JOBS Act

Summary - The SEC adopted amendments to its rules to implement inflation adjustments mandated by the Jumpstart Our Business Startups (JOBS) Act. The SEC is required to make inflation adjustments to certain JOBS Act rules at least once every five years. The new thresholds will become effective when they are published in the Federal Register.

The SEC adjusted the following thresholds:

Emerging Growth Companies. Title I of the JOBS Act added Securities Act Section 2(a)(19) and Exchange Act Section 3(a)(80) to define the term "emerging growth company" (EGC). The SEC is required every five years to index to inflation the annual gross revenue amount used to determine EGC status to reflect the change in the Consumer Price Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics (BLS). To carry out this statutory directive, the SEC adopted amendments to Securities Act Rule 405 and Exchange Act Rule 12b-2 to reflect within the EGC definition an inflation-adjusted annual gross revenue threshold from $1,070,000,000 to $1,235,000,000.

Regulation Crowdfunding. Title III of the JOBS Act added Securities Act Section 4(a)(6), which provides an exemption from the registration requirements of Securities Act Section 5 for certain crowdfunding transactions. Sections 4(a)(6) and 4A of the Securities Act set forth dollar amounts used in connection with the crowdfunding exemption, and Section 4A(h)(1) states that such dollar amounts shall be adjusted by the SEC not less frequently than once every five years to reflect the change in the CPI-U published by the BLS. The has adopted SEC adopted amendments to Regulation Crowdfunding to adjust certain of those dollar amounts for inflation pursuant to the statutory requirement.

The final rules will become effective upon their publication in the Federal Register.

For more information, click here.

Release No. 34-95607: Pay Versus Performance

Summary - The SEC adopted amendments to its rules to require registrants to disclose information reflecting the relationship between executive compensation actually paid by a registrant and the registrant’s financial performance. The rules implement a requirement mandated by the Dodd–Frank Wall Street Reform and Consumer Protection Act. The SEC proposed pay versus performance disclosure rules in 2015 and reopened the comment period on the proposal in January 2022.

The SEC indicates that the “amendments require registrants to provide a table disclosing specified executive compensation and financial performance measures for their five most recently completed fiscal years. With respect to the measures of performance, a registrant will be required to report its total shareholder return (TSR), the TSR of companies in the registrant's peer group, its net income, and a financial performance measure chosen by the registrant.” Registrants will be required to describe the relationships between the executive compensation actually paid and each of the performance measures, as well as the relationship between the registrant’s TSR and the TSR of its selected peer group. A registrant will also be required to provide a list of three to seven financial performance measures that it determines are its most important performance measures for linking executive compensation actually paid to company performance. Smaller reporting companies will be subject to scaled disclosure requirements under the rules.

The final rules will become effective 30 days following publication of the release in the Federal Register. Registrants must begin to comply with the new disclosure requirements in proxy and information statements that are required to include Item 402 executive compensation disclosure for fiscal years ending on or after December 16, 2022.

For more information, click here.

Release No. 34-95267: Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8

Summary - The SEC has proposed for public comment amendments to the rule that governs the process for including shareholder proposals in a company’s proxy statement. The SEC indicates that under Rule 14a-8, “companies generally must include shareholder proposals in their proxy statements. The rule, however, provides several bases for exclusion, including several substantive requirements that proposals must comply with to avoid exclusion. The proposed amendments would revise three of the bases for exclusion to promote more consistency and predictability in application.”

The proposed amendments to Rule 14a-8 would revise the following bases for exclusion:

Substantial Implementation. The proposed amendments would specify that a proposal may be excluded under this provision if the company has already implemented the “essential elements” of the proposal.
Duplication. The proposed amendments would specify that a proposal “substantially duplicates” another proposal previously submitted for the same shareholder meeting if it addresses the same subject matter and seeks the same objective by the same means.
Resubmission. The proposed amendments would provide that a proposal constitutes a resubmission if it substantially duplicates another proposal that was previously submitted for the same company’s prior shareholder meetings.

The public comment period will remain open for 60 days following publication of the proposing release on the SEC’s website or 30 days following publication of the proposing release in the Federal Register, whichever period is longer.

For more information, click here.

Release No. 34-95266: Proxy Voting Advice

Summary - The SEC adopted amendments to its rules governing proxy voting advice that aims “to avoid burdens on proxy voting advice businesses that may impair the timeliness and independence of their advice. The amendments also address misperceptions about liability standards applicable to proxy voting advice while also preserving investors’ confidence in the integrity of such advice.”

The final amendments rescind two rules applicable to proxy voting advice businesses that the SEC adopted in 2020. Specifically, the final amendments rescind conditions to the availability of two exemptions from the proxy rules’ information and filing requirements on which proxy voting advice businesses often rely.

Those conditions require that:

Registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner; and
Clients of proxy voting advice businesses are provided with a means of becoming aware of any written responses by registrants to proxy voting advice.

The SEC indicates that institutional investors and other clients of proxy voting advice businesses have continued to express concerns that these conditions could impose increased compliance costs on proxy voting advice businesses and impair the independence and timeliness of their proxy voting advice.

The final amendments also delete the 2020 changes made to the proxy rules’ liability provision. Although the 2020 changes were intended to clarify the application of this liability provision to proxy voting advice, they instead created a risk of confusion regarding the application of this provision to proxy voting advice, undermining the goal of the 2020 changes. The final amendments address the confusion while affirming that proxy voting advice generally is subject to liability under the proxy rules.

Finally, the adopting release rescinds guidance that the SEC issued in 2020 to investment advisers regarding their proxy voting obligations.

The final amendments and rescission of the guidance will become effective 60 days after publication in the Federal Register.

For more information, click here.

Release No. 33-11061: The Enhancement and Standardization of Climate - Related Disclosures for Investors

Summary - The SEC announced that it has extended the public comment period on the proposed rulemaking to enhance and standardize climate-related disclosures for investors from May 20, 2022 until June 17, 2022. In March 2022, the SEC proposed for public comment rule changes that would require companies to include certain climate-related disclosures in their registration statements and periodic reports, including “information about climate-related risks that are reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited financial statements.” The required information about climate-related risks also would include disclosure of a company’s greenhouse gas emissions, which have become a commonly used metric to assess a company’s exposure to such risks.

For more information, click here.

Release No.33-11070: Updating EDGAR Filing Requirements and Form 144 Filings

Summary - The SEC has adopted amendments to require certain forms that currently are permitted to be filed or submitted in paper format to be filed or submitted electronically. The amendments also amend certain forms to require structured data reporting and remove outdated references. The SEC indicates that the “amendments are intended to promote efficiency, transparency, and operational resiliency by modernizing how information is filed or submitted to the Commission and disclosed to the public. Furthermore, to benefit investors and the public, electronic filings will be more readily accessible to the public and available on the SEC website in easily searchable formats.”

Amendments

The amended rules apply to various issuers, affiliates, and national securities exchanges that file or submit reports to the SEC and will require the electronic filing or submission of:

Documents that currently are permitted to be submitted electronically under Rule 101(b) of Regulation S-T, including notices of exempt solicitations and exempt preliminary roll-up communications, the “glossy” annual report to security holders, Form 144 for sales of securities of issuers subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, filings on Form 6-K, and filings made by multilateral development banks.
Certifications made pursuant to Section 12(d) of the Exchange Act and Exchange Act Rule 12d1-3 that a security has been approved by an exchange for listing and registration.
Certain foreign language documents.

The amended rules also will require the use of Inline XBRL for the filing of the financial statements and accompanying notes to the financial statements required by Form 11-K and make technical updates to Form F-10, Form F-X, and Form CB to remove outdated references.

Effective Transition Periods

The amendments are effective 30 days after publication in the Federal Register. The SEC is providing the following transition periods to provide filers with adequate time to prepare to submit these documents electronically in accordance with the EDGAR Filer Manual, including applying for the necessary filer codes on EDGAR:

Six months after the effective date of the amendments for filers to submit their “glossy” annual reports to security holders electronically in accordance with the EDGAR Filer Manual and, other than for Form 144, for paper filers who would be first-time electronic filers;
Six months after the date of publication in the Federal Register of the SEC release that adopts the version of the EDGAR Filer Manual addressing updates to Form 144 for filing Form 144 electronically on EDGAR; and
Three years after the effective date of the amendments for filers to submit the financial statements and accompanying schedules to the financial statements required by Form 11-K in the Inline XBRL structured data language.

For more information, click here.

Release No. 33-11042: The Enhancement and Standardization of Climate-Related Disclosures for Investors

Summary - The SEC has proposed for public comment rule changes that would require companies to include certain climate-related disclosures in their registration statements and periodic reports, including “information about climate-related risks that are reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited financial statements.” The required information about climate-related risks also would include disclosure of a company’s greenhouse gas emissions, which have become a commonly used metric to assess a company’s exposure to such risks.

The proposed rule changes would require disclosure of information about:

The company’s governance of climate-related risks and relevant risk management processes;
How any climate-related risks identified by the company have had or are likely to have a material impact on its business and consolidated financial statements;
How any identified climate-related risks have affected or are likely to affect the company’s strategy, business model, and outlook; and
The impact of climate-related events (severe weather events and other natural conditions) and transition activities on the line items of a company’s consolidated financial statements, as well as on the financial estimates and assumptions used in the financial statements.

The proposed rules also would require a company to disclose information about its direct greenhouse gas (GHG) emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2). In addition, a company would be required to disclose GHG emissions from upstream and downstream activities in its value chain (Scope 3), if material or if the company has set a GHG emissions target or goal that includes Scope 3 emissions. The SEC indicates that these proposals for GHG emissions disclosures would provide investors with decision-useful information to assess a company’s “exposure to, and management of, climate-related risks, and in particular transition risks. The proposed rules would provide a safe harbor for liability from Scope 3 emissions disclosure and an exemption from the Scope 3 emissions disclosure requirement for smaller reporting companies.” The proposed disclosures are similar to those that many companies already provide based on broadly accepted disclosure frameworks, such as the Task Force on Climate-Related Financial Disclosures and the Greenhouse Gas Protocol.

Under the proposed rule changes, accelerated filers and large accelerated filers would be required to include an attestation report from an independent attestation service provider covering Scopes 1 and 2 emissions disclosures, with a phase-in over time, to promote the reliability of GHG emissions disclosures for investors.

The proposed rules would include a phase-in period for all companies, with the compliance date dependent on the company’s filer status, and an additional phase-in period for Scope 3 emissions disclosure.

The comment period will remain open for 30 days after publication in the Federal Register, or 60 days after the date of issuance and publication on sec.gov, whichever period is longer.

For more information, click here.

Release No. 34-94212: The Commission’s Whistleblower Program Rules

Summary - The SEC has proposed for public comment two amendments to the rules governing its whistleblower program. The first proposed amendment concerns award claims for related actions that would be otherwise covered by an alternative whistleblower program. The second affirms the SEC's authority to consider the dollar amount of a potential award for the limited purpose of increasing an award but not to lower an award.

Specifically, the SEC indicates that the proposed amendment to Rule 21F-3 would allow the SEC to pay whistleblower awards for certain actions brought by other entities, including designated federal agencies, in cases where those awards might otherwise be paid under the other entity's whistleblower program. The proposed amendments also would affirm the SEC's authority under Rule 21F-6 to consider the dollar amount of a potential award for the limited purpose of increasing the award amount, and it would eliminate the agency’s authority to consider the dollar amount of a potential award for the purpose of decreasing an award.

The public comment period will remain open for 60 days following publication of the proposed release on the SEC's website or 30 days following publication of the proposed release in the Federal Register, whichever period is longer.

For more information, click here.

Release No. 34-94196: Shortening the Securities Transaction Settlement Cycle

Summary - The SEC has issued for public comment proposed rule changes to reduce risks in the clearance and settlement of securities, including by shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one business day after the trade date (T+1). The proposed changes are designed to reduce the credit, market, and liquidity risks in securities transactions faced by market participants and U.S. investors.

In addition to shortening the standard settlement cycle, the proposal includes rules directed at broker-dealers and registered investment advisers to shorten the process of confirming and affirming the trade information necessary to prepare a transaction for settlement so that it can be completed by the end of the trade date. Further, the proposal includes a new requirement to facilitate straight-through processing, which would apply to certain types of clearing agencies that provide central matching services. Central matching service providers help facilitate the processing of institutional trades between broker-dealers and their institutional customers. The proposed rule would require new policies and procedures directed to straight-through processing and require an annual report on progress with the process.

With the goal of shortening the settlement cycle further, the proposal solicits comments on challenges associated with and potential paths to achieving a same-day settlement cycle.

For more information, click here.

Release No. 33-11030: Modernization of Beneficial Ownership Reporting

Summary - The SEC has issued for public comment rule amendments governing beneficial ownership reporting under Exchange Act Sections 13(d) and 13(g). The proposed amendments would update those rules to provide more timely information to meet the needs of today's financial markets. The proposed amendments to Regulation 13D-G would:
Accelerate the filing deadlines for Schedules 13D beneficial ownership reports from 10 days to five days and require that amendments be filed within one business day; generally accelerate the filing deadlines for Schedule 13G beneficial ownership reports (which differ based on the type of filer);
Expand the application of Regulation 13D-G to certain derivative securities;
Clarify the circumstances under which two or more persons have formed a "group" that would be subject to beneficial ownership reporting obligations;
Provide new exemptions to permit certain persons to communicate and consult with one another, jointly engage issuers, and execute certain transactions without being subject to regulation as a "group;" and;
Require that Schedules 13D and 13G be filed using a structured, machine-readable data language.

For more information, click here.

Release No. 34-94313 : Short Position and Short Activity Reporting by Institutional Investment Managers

Summary - The SEC has proposed changes that would provide greater transparency to investors and regulators by increasing the public availability of short sale related data. New Exchange Act Rule 13f-2 and the corresponding Form SHO would “require certain institutional investment managers to report short sale related information to the SEC on a monthly basis. The Commission then would make aggregate data about large short positions, including daily short sale activity data, available to the public for each individual security.”

Specifically, Rule 13f-2 would require institutional investment managers exercising investment discretion over short positions meeting specified thresholds to report on the Proposed Form SHO information relating to end-of-the-month short positions and certain daily activity affecting such short positions. The SEC would aggregate the resulting data by security, thereby maintaining the confidentiality of the reporting managers, and publicly disseminate the data to all investors. This new data would supplement the short sale data that is currently publicly available from FINRA and stock exchanges.

The SEC has also proposed a new provision of Regulation SHO, Rule 205, which would establish a new “buy to cover” order marking requirement for broker-dealers. Regulation SHO, which is the SEC’s primary short selling regulation, requires broker-dealers to identify each sale order that it effects as either “long,” “short,” or “short-exempt,” but it does not currently have a corresponding requirement for purchase orders. Proposed Rule 205 would require a broker-dealer to mark a purchase order as “buy to cover” if the purchaser has any short position in the same security at the time the purchase order is entered. This information will be especially useful to the Commission in reconstructing significant market events and identifying potentially abusive trading practices including short squeezes.

Relatedly, the SEC proposed to amend the national market system plan governing the consolidated audit trail (CAT). The amendment would require CAT reporting firms to report “buy to cover” information to CAT. The proposed amendments also include a provision that would require each CAT reporting firm to indicate where it is asserting use of the bona fide market making exception under Regulation SHO.

In light of Proposed Rule 13f-2, the SEC voted to reopen the comment period for Proposed Exchange Act Rule 10c-1. Rule 10c-1 was proposed by the SEC on November 18, 2021, to increase the transparency and efficiency of the securities lending market by requiring any person that loans a security on behalf of itself or another person to report the material terms of those securities lending transactions and related information to a registered national securities association. The initial comment period for proposed Rule 10c-1 ended on January 7, 2022.

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Release No. 34-93784: Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition against Undue Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions

Summary - The SEC has issued for public comment a proposed rule, Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition against Undue Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions. The proposed rule is aimed at preventing fraud, manipulation and deception in connection with security-based swaps, to prevent undue influence over the chief compliance officer (CCO) of security-based swap dealers and major security-based swap participants (SBS Entities), and to require any person with a large security-based swap position to publicly report certain information related to the position. The proposal includes the following new rules:

Rule 9j-1, which would prohibit fraudulent, deceptive, or manipulative conduct in connection with all transactions in security-based swaps, including misconduct in connection with the exercise of any right or performance of any obligation under a security-based swap.
Rule 15Fh-4(c), which would prohibit personnel of an SBS Entity from taking any action to coerce, mislead or otherwise interfere with the SBS Entity’s CCO.
Rule 10B-1, which would require any person, or group of persons, who owns a security-based swap position that exceeds the threshold amount set by the rule to promptly file with the SEC a statement containing the information required by Schedule 10B on the SEC’s EDGAR filing system. The filings will be publicly available.

The comment period will remain open for 45 days after publication in the Federal Register.

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Release No. IC-34441: Money Market Fund Reforms Modernization

Summary - The SEC has issued for public comment a proposed rule, Money Market Fund Reforms. This proposal includes amendments to certain rules that govern money market funds under the Investment Company Act of 1940. The SEC indicates that in March 2020, growing economic concerns about the impact of the COVID-19 pandemic led investors to reallocate their assets into cash and short-term government securities. Prime and tax-exempt money market funds, particularly institutional funds, experienced large outflows, which contributed to stress on short-term funding markets. The SEC’s proposed amendments are designed, in part, to address concerns about prime and tax-exempt money market funds highlighted by these events.

The proposed amendments would “increase liquidity requirements for money market funds to provide a more substantial liquidity buffer in the event of rapid redemptions. The proposed amendments also would remove provisions in the current rule permitting or requiring a money market fund to impose liquidity fees or to suspend redemptions through a gate when a fund’s liquidity drops below an identified threshold. These provisions appeared to contribute to investors’ incentives to redeem in March 2020 as some funds’ reported liquidity levels declined.”

To address concerns about redemption costs and liquidity, the proposal would require institutional prime and institutional tax-exempt money market funds to implement swing pricing policies and procedures that would require redeeming investors, under certain circumstances, to bear the liquidity costs of their redemptions.

Further, the proposal would amend certain reporting requirements to improve the availability of information about money market funds and enhance the SEC’s monitoring and analysis of these funds.

The comment period will remain open for 60 days after publication in the Federal Register.

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Release No. 34-93783: Share Repurchase Disclosure Modernization

Summary - The SEC proposed amendments to its rules regarding disclosure about an issuer’s repurchases of its equity securities, often referred to as share buybacks. The SEC indicates that the proposed rules would require an issuer to provide a new Form SR before the end of the first business day following the day the issuer executes a share repurchase. Form SR would require disclosure identifying the:

Class of securities purchased;
Total amount purchased; and
Average price paid.

Issuers would also have to disclose on Form SR the aggregate total amount purchased on the open market in reliance on the safe harbor in Exchange Act Rule 10b-18 or pursuant to a plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c).

The proposed amendments also would “enhance existing periodic disclosure requirements regarding repurchases of an issuer’s equity securities. Specifically, the proposed amendments would require an issuer to disclose: the objective or rationale for the share repurchases and the process or criteria used to determine the repurchase amounts; any policies and procedures relating to purchases and sales of the issuer’s securities by its officers and directors during a repurchase program, including any restriction on such transactions; and whether the issuer is making its repurchases pursuant to a plan that it intends to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) and/or the conditions of the Exchange Act Rule 10b-18 non-exclusive safe harbor.”

The proposed rules apply to issuers that repurchase securities registered under Section 12 of the Securities Exchange Act of 1934, including foreign private issuers and certain registered closed-end funds.

The comment period will remain open for 45 days after publication in the Federal Register.

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Release No. 33-11013: Rule 10b5-1 and Insider Trading

Summary - The SEC has issued for public comment a proposal, Rule 10b5-1 and Insider Trading. This proposal includes amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 to enhance disclosure requirements and investor protections against insider trading. The proposal includes updates to Rule 10b5-1(c), which provides an affirmative defense to insider trading for parties that frequently have access to material nonpublic information, including corporate officers, directors and issuers.

The proposed amendments to Rule 10b5-1 would update the requirements for the affirmative defense, including:

Imposing a cooling off period before trading could commence under a plan;
Prohibiting overlapping trading plans; and
Limiting single-trade plans to one trading plan per twelve month period.

In addition, the proposal would require directors and officers to furnish written certifications that they are not aware of any material nonpublic information when they enter into the plans and expand the existing good faith requirement for trading under Rule 10b5-1 plans. This proposal aims to address critical gaps in the SEC’s insider trading regime and to help shareholders understand when and how insiders are trading in securities for which they may at times have material nonpublic information.

According to the SEC, the amendments would also elicit “more comprehensive disclosure about issuers’ policies and procedures related to insider trading and their practices around the timing of options grants and the release of material nonpublic information. A new table would report any options granted within 14 days of the release of material nonpublic information and the market price of the underlying securities the trading day before and the trading day after the disclosure of the material non-public information. Insiders that report on Forms 4 or 5 would have to indicate via a new checkbox whether the reported transactions were made pursuant to a Rule 10b5-1(c) or other trading plan. Finally, gifts of securities that were previously permitted to be reported on Form 5 would be required to be reported on Form 4.”

The comment period will remain open for 45 days after publication in the Federal Register.

For more information, click here.

Release No. 34-93614: Electronic Recordkeeping Requirements for Broker-Dealers, Security-Based Swap Dealers, and Major Security-Based Swap Participants

Summary - The SEC has issued for public comment a proposed rule, Electronic Recordkeeping Requirements for Broker-Dealers, Security-Based Swap Dealers, and Major Security-Based Swap Participants. This proposal includes amendments to the electronic recordkeeping and prompt production of records requirements applicable to broker-dealers, security-based swap dealers (SBSDs), and major security-based swap participants (MSBSPs).

The SEC’s broker-dealer electronic recordkeeping rule requires firms to preserve electronic records exclusively in a non-rewriteable, non-erasable format (otherwise known as write once, read many). The SEC indicates that the proposed amendments “would add an audit-trail alternative. Under this alternative, electronic records could be preserved in a manner that permits the recreation of an original record if it is altered, over-written, or erased. The audit-trail alternative is designed to provide broker-dealers with greater flexibility in configuring their electronic recordkeeping systems so they more closely align with current technologies and practices while also protecting the authenticity and reliability of original records.”

The proposed amendments would require nonbank SBSDs and MSBSPs to preserve electronic records using either of the above alternatives that would be available to broker-dealers. The amendments also would require broker-dealers and all types of SBSDs and MSBSPs to produce electronic records to securities regulators in a reasonably usable electronic format. This proposal is designed to facilitate examinations and make them more efficient.

Comments should be received on or before January 3, 2022.

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Release No. 34-93613: Reporting of Securities Loans

Summary - The SEC has issued for public comment a proposed rule, Reporting of Securities Loans. This proposal is intended to increase the transparency and efficiency of the securities lending market by requiring any person that loans a security on behalf of itself or another person to report the material terms of those securities lending transactions and related information regarding the securities the person has on loan and available to loan to a registered national securities association (RNSA).

The proposed rule would also require that the RNSA make available to the public certain information concerning each transaction and aggregate information on securities on loan and available to loan.

Comments on the proposal are due 30 days from publication in the Federal Register.

For more information, click here.

Release No. 34-93595: Proxy Voting Advice

Summary - The SEC published for public comment proposed amendments to its rules governing proxy voting advice. The proposed amendments “aim to address concerns expressed by investors and others that the current rules may impede and impair the timeliness and independence of proxy voting advice and subject proxy voting advice businesses to undue litigation risks and compliance costs.”

The proposed amendments would rescind two rules applicable to proxy voting advice businesses that the Commission adopted in 2020. Specifically, the SEC is proposing to rescind conditions to the availability of two exemptions from the proxy rules’ informational and filing requirements on which proxy voting advice businesses often rely. Those conditions require that:

Registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner; and
Clients of proxy voting advice businesses are provided with a means of becoming aware of any written responses by registrants to proxy voting advice.

The SEC indicates that investors and others have expressed concerns that these conditions will impose increased compliance costs on proxy voting advice businesses and impair the independence and timeliness of their proxy voting advice.

The proposed amendments would also rescind the 2020 changes made to the proxy rules’ liability provision. Although the changes were intended to make clear that proxy voting advice is subject to liability under the proxy rules, investors and others have expressed concerns that the 2020 changes have created confusion, increased proxy voting advice businesses’ litigation risks, and potentially impair the independence and quality of the proxy voting advice.

The proposal will have a 30-day public comment period following its publication in the Federal Register.

For more information, click here.

Release No. 33-11005: Updating EDGAR Filing Requirements

Summary - The SEC published proposed amendments to update electronic filing requirements. According to the SEC, the agency currently permits and sometimes requires certain forms to be filed or submitted in paper format. The proposed rule and form amendments would require certain forms to be filed or submitted electronically. The proposed amendments also would make technical amendments to certain forms to require structured data reporting and remove outdated references. The amendments are intended to promote efficiency, transparency, and operational resiliency by modernizing the manner in which information is submitted to the SEC and disclosed.

Furthermore, publicly filed electronic submissions would be more readily accessible to the public and would be available on our website in easily searchable formats, which benefits both investors and the broader public. The SEC indicates, that the “electronic filing capabilities have been an effective measure in addressing logistical and operational issues raised by the spread of coronavirus disease (COVID-19). Electronic submissions would allow the Commission, and those filing submissions, to effectively navigate any future disruptive events that make the paper submission process unnecessarily burdensome, impractical, or unavailable.”

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Release No. 33-11016: Adoption of Updated EDGAR Filer Manual

Summary - The SEC has updated Volume II of the EDGAR Filer Manual. This volume has been updated to reflect new EDGAR filing requirements, including those relating to Rule 15Fk-1(c) under the Securities Exchange Act of 1934, which requires security-based swap dealers and security-based swap participants (“SBS Entities”) to submit an annual report to the SEC.

The EDGAR system was updated for these changes December 20, 2021.

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Release No. 34-93701: Holding Foreign Companies Accountable Act Disclosure

Summary - The SEC has adopted amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act (HFCAA). The Final Rule, Release No. 34-93701, Holding Foreign Companies Accountable Act Disclosure, applies to registrants the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board (PCAOB) is unable to inspect or investigate (Commission-Identified Issuers).

"We have a basic bargain in our securities regime, which came out of Congress on a bipartisan basis under the Sarbanes-Oxley Act of 2002. If you want to issue public securities in the U.S., the firms that audit your books have to be subject to inspection by the PCAOB," said SEC Chair Gary Gensler. "This final rule furthers the mandate that Congress laid out and gets to the heart of the SEC's mission to protect investors. The Commission and the PCAOB will continue to work together to ensure that the auditors of foreign companies accessing U.S. capital markets play by our rules. We hope foreign governments will, working with the PCAOB, take action to make that possible."

The final amendments require Commission-Identified Issuers to submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction. The amendments also require that a Commission-Identified Issuer that is a "foreign issuer," as defined in Exchange Act Rule 3b-4, provide certain additional disclosures in its annual report for itself and any of its consolidated foreign operating entities. Further, the release provides notice regarding the procedures the SEC has established to identify issuers and to impose trading prohibitions on the securities of certain Commission-Identified Issuers, as required by the HFCAA.

The SEC will identify Commission-Identified Issuers for fiscal years beginning after December 18, 2020. A Commission-Identified Issuer will be required to comply with the submission and disclosure requirements in the annual report for each year in which it was identified. If a registrant is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended December 31, 2021, the registrant will be required to comply with the submission or disclosure requirements in its annual report filing covering the fiscal year ended December 31, 2022.

The amendments are effective 30 days after publication in the Federal Register. The new addition to §232.405, Interactive Data File submissions, is effective from 30 days after publication in the Federal Register through July 1, 2023.

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Release No. 34-93596: Universal Proxy

Summary - The SEC adopted final rules requiring parties in a contested election to use universal proxy cards that include all director nominees presented for election at a shareholder meeting. The SEC indicates that the rule changes will give shareholders the ability to vote by proxy for their preferred combination of board candidates, similar to voting in person.

The final rules will require dissident shareholders and registrants to provide shareholders with a proxy card that includes the names of all registrant and dissident nominees. The rules will apply to all non-exempt solicitations for contested elections other than those involving registered investment companies and business development companies. The rules will require registrants and dissidents to provide each other with notice of the names of their nominees, establish a filing deadline and a minimum solicitation requirement for dissidents, and prescribe presentation and formatting requirements for universal proxy cards.

To further facilitate shareholder voting in director elections, the SEC also adopted amendments to the proxy rules to ensure that proxy cards clearly specify the applicable shareholder voting options in all director elections and to require proxy statements to disclose the effect of a shareholder’s election to withhold its vote.

To facilitate transition to the new rules, compliance with the rules related to universal proxy cards will be required for any shareholder meeting involving contested director election held after August 31, 2022.

For more information, click here.