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This article examines rule amendments issued by the US Securities and Exchange Commission in November 2020, as part of the SEC’s ongoing “disclosure effectiveness initiative”, that revise in significant respects the requirements for financial disclosures presented in SEC filings as Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This article provides an in-depth analysis of the rule amendments in the context of contrasting perspectives expressed by the SEC, individual SEC Commissioners who dissented from adoption of the amendments, and market participants regarding the merits of the SEC’s movement away from prescriptive disclosure requirements towards a more principles-based approach to disclosure.

Although the SEC’s rules have long reflected a mix of principles-based and prescriptive disclosure elements, the principles-based emphasis in this latest stage of the SEC’s disclosure modernization project accords the managements of filing companies greater latitude to determine whether financial information is material to investors and how such information should be presented.

This article provides expert guidance on a major new SEC disclosure development from an experienced securities lawyer.

This article examines the comprehensive amendments recently adopted by the US Securities and Exchange Commission (SEC) to its accounting and other rules that govern financial statement filing requirements for significant business acquisitions and dispositions.

The article provides an in-depth analysis of the rule changes in the context of the SEC’s attempt to balance the right of investors to obtain adequate information about the impact of an acquired or disposed business on an SEC registrant against the filing burdens that can result from over-identification of acquisitions or dispositions as material to the registrant based on the SEC’s “significance” tests.

The rule amendments bring enhanced coherence to a reporting framework that has been characterized in part by inconsistencies, gaps, unreliable valuation principles, and ambiguities. The amendments contribute to the SEC’s ongoing disclosure effectiveness initiative by updating, clarifying, and codifying many requirements that had developed piecemeal in market practice or through guidance issued by the SEC’s staff.

This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.

This paper examines a legal bulletin issued by the staff of the Securities and Exchange Commission (SEC) in November 2017 that provides significant new guidance to SEC-reporting companies on the application of the “ordinary business” and “economic relevance” exceptions in Rule 14a-8 under the Securities Exchange Act of 1934. Rule 14a-8 governs an SEC-reporting company’s obligation to include shareholder proposals in its proxy materials for a shareholder meeting.

This paper provides in-depth analysis of the new interpretive guidance against the background of continuing controversy between companies and shareholder-proponents over the bases on which companies should be permitted to exclude from their proxy materials proposals that proponents believe raise social, ethical or other policy issues that are appropriate for shareholder action.

In acting on a company’s request to exclude a proposal, the SEC staff must make difficult judgments regarding the connection between policy issues reflected in the proposal and the company’s business operations, which the company’s directors and officers seek to conduct free of inappropriate shareholder oversight. In the new guidance, the staff calls for assistance in making these judgments by soliciting greater board-level involvement in the exclusion determination and encouraging the company in its no-action submission to discuss the board’s analysis and decision-making process. Greater board participation should encourage a more probing assessment of the considerations weighed in these determinations.

This paper provides expert guidance on a major new SEC disclosure requirement from experienced securities lawyers.

This article examines the first action by the US Securities and Exchange Commission to enforce the “equal-or-greater-prominence” requirement of its rules governing the presentation by SEC-reporting companies, in their SEC filings and earnings releases, of financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

This article provides an in-depth analysis of the equal-or-greater-prominence rule and the SEC’s enforcement posture in the context of the SEC’s concern that some companies present non-GAAP financial measures in a manner that inappropriately gives the non-GAAP measures greater authority than the comparable GAAP financial measures.

Although the appropriate use of non-GAAP financial measures can enhance investor understanding of a company’s business and operating results, investors could be misled about the company’s GAAP results by disclosures that unduly highlight non-GAAP measures. The SEC’s enforcement action signals a focus on the manner in which companies present non-GAAP financial measures as well as on how they calculate the measures.

This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.

This article examines compliance and disclosure interpretations issued by the staff of the Securities and Exchange Commission in May 2016 that provide guidance to SEC-reporting companies on how they can use financial measures not prepared in accordance with generally accepted accounting principles in a manner that complies with SEC rules governing the presentation of non-GAAP measures in SEC filings and other public communications.

This article provides an in-depth analysis of the new interpretive guidance in the context of the increasing use of non-GAAP financial measures by SEC-reporting companies and the SEC’s concern that some companies have been using non-GAAP measures inappropriately to present a materially different picture of their operating performance than investors can discern from financial measures prepared in accordance with GAAP.

Although the appropriate use of non-GAAP financial measures can enhance investor understanding of a company’s business and operating results, a relatively permissive SEC attitude towards the use of non-GAAP measures in recent years has emboldened some companies to increase their reliance on non-GAAP measures in a manner the SEC views as inconsistent with its rules. The SEC staff’s new guidance signals a renewed focus by the SEC on compliance with its requirements concerning the nature of permissible non-GAAP measures and the ways in which companies should present those measures.

This article provides expert guidance on a major new SEC disclosure requirement from experienced securities lawyers.

This article examines the rule issued by the Securities and Exchange Commission in August 2015 that requires most SEC-reporting companies to disclose annually the ratio of the annual total compensation of their chief executive officer to the median of the annual total compensation of their employees other than the CEO.

This article provides an in-depth analysis of the operation of the controversial pay ratio disclosure rule against the backdrop of concerns expressed by many commenters on the rule proposal, as well as by the two Commissioners who dissented from adoption of the rule, that the disclosure will not provide meaningful information to investors and will be excessively costly and burdensome for companies to produce.

The SEC fashioned the final pay ratio disclosure rule with a vaguely defined statutory purpose to guide it and a heavy volume of comments on its rule proposal that urged widely disparate approaches to implementation. In overhauling the proposed rule, the SEC sought to satisfy its mandate under the Dodd-Frank Act while providing companies with flexibility in implementing the new rule that it believes will reduce compliance costs and burdens.

This article provides expert guidance on a major new SEC disclosure requirement from experienced securities lawyers.

To review guidance issued in April 2014 by the staff of the USA Securities and Exchange Commission (SEC) that clarifies how participants in regulated securities offerings, business combinations, proxy contests, and tender offers may transmit required cautionary statements and legends to the securities marketplace via social media technology platforms whose space limitations preclude display of the full text of the required statements.

Examines the new SEC staff interpretative guidance in light of the tension between the disclosure requirements of the SEC’s communications rules and the characteristics of some social media platforms that do not permit compliance with the SEC rules in the same manner as traditional paper-based disclosure vehicles.

The staff’s new guidance permits issuers and other parties to comply with the communications rules by using in their social media transmissions an active hyperlink that connects to the text of the required statements, thereby dispelling the legal uncertainty about the hyperlinking approach that has discouraged parties from using some social media outlets to disseminate information about their transactions. The article notes that the staff’s conditions place important limitations on the use of hyperlinks, especially in connection with the use of popular social media platforms such as LinkedIn, Facebook, and others that do not impose a cap on the number of characters or amount of text that may be included in a communication, and fails to address the permissibility of other approaches to overcoming the space limitations of some platforms.

Provides expert guidance from experienced securities lawyers.

The purpose of this paper is to explain the guidance on interpretive issues under Exchange Act Rule 14a‐8 published in SEC Staff Legal Bulletin No. 14F (SLB 14F).

The paper summarizes the guidance to companies provided by SLB 14F on how to verify a proponent's eligibility to submit a proposal, how to address submissions of revised proposals, and how to withdraw no‐action requests for proposals with multiple proponents.

SLB 14F is the staff's seventh legal bulletin on Rule 14a‐8, which highlights the procedural and substantive complexities associated with shareholder proposals.

The paper provides expert guidance from experienced financial services lawyers.

The purpose of this paper is to explain the SEC's proposal to require domestic and foreign public companies that prepare their financial statements in accordance with US GAAP to file financial statements contained in registration statements and periodic reports in an interactive data format using XBRL, or “eXtensible Business Reporting Language”.

The paper explains the purpose of XBRL, provides an overview of the SEC's proposal, discusses the consequences of noncompliance, and explains the SEC's “bifurcated” approach to filers' liability for the interactive data they are required to provide.

XBRL, like the other electronic formats currently used by registrants in their SEC filings, defines or “tags” data using standard definitions. The SEC believes that financial reporting based on the XBRL format would create new ways for investors, analysts, and others to retrieve and use financial information in documents filed with the SEC. XBRL tagging of financial statements most likely represents only the SEC's first step in moving toward more widespread adoption of XBRL reporting.

The paper contains practical guidance by experienced securities lawyers.

The purpose of this paper is to review the principal provisions of the Jumpstart Our Business Startups (JOBS) Act, which was enacted in April 2012 and represents significant legislative reform of securities regulation in the USA.

The paper examines the modified US securities regulatory regime introduced for initial public offerings and SEC reporting by a newly designated class of smaller securities issuers referred to as “emerging growth companies” and summarizes reforms to the regulation of capital‐raising transactions by small issuers and other companies that are intended to facilitate the creation of new jobs by easing regulatory burdens.

The JOBS Act should meet its objective of providing emerging growth companies, at reduced cost, with an orderly transition from a private existence with relatively few securities‐law concerns to a public one with numerous compliance obligations. Companies also will have greater opportunities to access capital through the availability of additional exemptions from Securities Act registration and the elimination of some restrictions on offering‐related communications with investors. The relaxation or elimination of long‐accepted methods for minimizing fraud and abuse in securities offerings, however, could result in a significant increase in investment scams and other wrongdoing.

The paper provides expert guidance from experienced financial services lawyers.