Yesterday, during remarks at the Stanford Rock Center for Corporate Governance, SEC Chairman Atkins kicked off the Commission’s request for comments on modernizing the IPO process. Noting that the Staff is “well underway” in its efforts to rationalize public company disclosure requirements (including with respect to executive compensation!), the Chairman noted, “Of course, the incentives for going public are only as effective as the process that companies must navigate to capitalize on them. With that in mind, I have asked the Commission staff to prepare recommendations to modernize the IPO process itself.” That includes the gun-jumping rules:
I routinely hear from companies and their advisors that one of the challenges of the IPO process is navigating the communication—or gun-jumping—rules under the Securities Act of 1933. In light of this, I would like to see any rulemaking in this area include considerable reforms to these rules. When Congress originally enacted the Securities Act, a company could not make any written or oral “offers” to sell securities before a registration statement became effective. But as Linda Quinn—a former director of the SEC’s Division of Corporation Finance—once questioned, “[d]o we need to continue to register offers?”
Over time, both Congress and the Commission eased the prohibition on offers. However, the Commission’s spider web of gun-jumping prohibitions and exceptions remains difficult to maneuver. Moreover, the last time that the Commission implemented significant reform in this area was more than 20 years ago. The ways in which businesses communicated with employees, customers, and potential investors at that time bears little resemblance to how they do so now. As the Commission staff prepares its recommendations, I look forward to constructing a more harmonized set of rules that offer clarity, simplicity, and congruity with today’s technology.
It also includes reassessing the method by which companies go public – including de-SPACs and (perhaps especially) direct listings.
As we look for ways to improve the process and method of becoming a public company, regulators and market participants might consider revisiting how direct listings are conducted and the associated legal requirements. As part of this consideration, it behooves us to ask questions such as: following the 2023 Supreme Court decision, does the market really believe that a Securities Act registration statement continues to offer meaningful investor protections in the direct listing context? Is the requirement to prepare a Securities Act registration statement—as opposed to an Exchange Act one—a hindrance for companies contemplating a direct listing? And beyond the form of the registration statement, are there other regulatory frictions in the direct listing process that the Commission or its staff can reduce through rulemaking or guidance, respectively, while preserving investor protections?
If you have thoughts on IPO modernization, Chairman Atkins stressed, “All ideas are most welcome. I have just one request—that you be bold and creative. And as you share your ideas, you have my word that we are listening.”
After the remarks, there’s information on how to submit comments:
Members of the public who wish to provide their views on ways to improve the SEC’s communication or other rules related to IPOs, or how the agency can remove roadblocks to methods of going public unrelated to a “traditional” IPO, may submit comments electronically or on paper . . . All submissions should refer to File Number CLL-16, and the file number should be included on the subject line if email is used. Please submit your comments as soon as possible and by no later than July 27, 2026.
Yes, July 27 is the same day comments on the Registered Offering Reform proposal are due, and you may have a number of comment letters in the works already. Thankfully, Chairman Atkins noted they will still consider comments received after that date.
Speaking of submitting comments, it feels like the three major rulemaking proposals released in the last few weeks were published in the Federal Register very quickly! That starts the clock for the comment period, so we now know when comments are due for all these proposals. For those interested in submitting comments (or just curious about timing for next steps), here are the due dates (all 60 days after publication):
In our latest “Timely Takes” podcast, I’m joined by IR professional and CEO of DeCue Technologies, James Palczynski. James shares that new AI systems can use paralinguistic data below the level of human perception to extrapolate information — like the emotional state and stress levels (and even some mental and physical health conditions) of the speaker — from audio files, and it has already been applied to earnings calls. (James was introduced to this technology through the paper, Silent Suffering, in the Journal of Accounting Research.)
– What Advanced Voice Analysis is and What it Detects
– How AI has Changed Voice Analysis
– How Advanced Voice Analysis Technology is Being Used Today
– Information Investors Can Extrapolate from Voice Analysis
– Challenges this Technology Presents for Public Company Earnings & Investor Calls
– How to Monitor the Risks and Understand Defensive Capabilities
As always, if you have insights on a securities law, capital markets or corporate governance issue, trend or development that you’d like to share in a podcast, we’d love to hear from you. You can email me and/or John at mervine@ccrcorp.com or john@thecorporatecounsel.net.
Last week, Regent University School of Law announced that Commissioner Peirce will be joining the law school faculty as an Associate Professor in November. As Dave has explained, the Chair and SEC Commissioners may continue to serve up to approximately 18 months after their terms expire if they are not replaced before then. Commissioner Peirce joined the SEC in 2018, but, as various news outlets have noted, her most recent term began in 2020 and expired in June 2025. So she’s been serving under an extension since then, and I guess this news shouldn’t really come as a surprise (though it did to me, initially) since the timing seems to align pretty closely with the end of that 18-month extension.
Regent University’s announcement describes her deep and varied career in financial regulation — both in academia and public service.
She began serving as a commissioner on the U.S. Securities and Exchange Commission in 2018. Before that, she conducted research on financial markets at the Mercatus Center at George Mason University and served in several roles connected to federal securities law, including as Senior Counsel on the U.S. Senate Committee on Banking, Housing, and Urban Affairs; Counsel to SEC Commissioner Paul S. Atkins; and Staff Attorney in the SEC’s Division of Investment Management. Her scholarship and public commentary have emphasized the need for regulatory humility, the importance of capital markets in the economy and society, the appropriate regulation of crypto assets, and the interaction between innovation and regulation. Peirce earned her J.D. from Yale Law School and her bachelor’s degree in economics from Case Western Reserve University. She clerked for Judge Roger B. Andewelt of the U.S. Court of Federal Claims.
Commissioner Peirce’s exact departure date has not been set yet, as Bloomberg reports, and she stressed: “Until I leave the Commission, my focus is on the work of the SEC.”
With Commissioner Peirce departing during such a busy time for the Commission, two questions immediately popped into my head: (1) Who will lead the Crypto Task Force? (2) What does this mean for Commission action?
The Crypto Task Force has already accomplished A LOT (especially with the Crypto Assets Proposed Rule sitting with OIRA), so perhaps the heaviest lift for the Crypto Task Force is in the rearview mirror at this point. Still, I assume someone will take over for the post-proposal phase.
On Commission action, I frankly just couldn’t remember what the SEC’s quorum requirements were. I’m not sure I’ve paid much attention to them before, but this won’t be the first time the SEC has found itself in a two-member situation. In 2016, the Commission was about to be down to two members, to which Broc said:
No worries. Back in the 90s, President Clinton was slow to nominate new members to federal agencies and the SEC dropped down to a level of two Commissioners for a spell – Chair Levitt & Commissioner Wallman. In order to get business done, the SEC amended its rules to accommodate the Commission when it drops to such a low level. “The Rule of 2” – adopted in 1995 – is still on the books:
§200.41 Quorum of the Commission.
A quorum of the Commission shall consist of three members; provided, however, that if the number of Commissioners in office is less than three, a quorum shall consist of the number of members in office; and provided further that on any matter of business as to which the number of members in office, minus the number of members who either have disqualified themselves from consideration of such matter pursuant to §200.60 or are otherwise disqualified from such consideration, is two, two members shall constitute a quorum for purposes of such matter.
So the quorum rules are different when there are three sitting Commissioners as compared to two. Thanks to Hunton & Williams’ Scott Kimpel for the help finding this rule…
As far as I can tell, this rule hasn’t been amended since 1995. Point being, it doesn’t sound like a two-member Commission will slow the pace of rulemaking!
On Wednesday, the SEC issued an exemptive order adding three more “qualifying jurisdictions” and “qualifying regulations” to the six listed in its March 5 order exempting covered insiders from Section 16(a) if foreign laws already impose on them substantially similar requirements.
The three additional qualifying jurisdictions are Australia, India, and Singapore, and the three additional qualifying regulations are listed in the exemptive order. The exemption extends to insiders of an issuer organized in a qualifying jurisdiction (now numbering nine) even if the insider is subject to the qualifying regulation of another qualifying jurisdiction (e.g., the issuer is organized in India but its securities trade in Canada and the insider is required to report transactions under the Canadian qualifying regulation).
To qualify for the exemption, insiders must comply with all the requirements set forth in the March 5 order discussed in my prior blog.
Monday is Memorial Day. This year, I’d like to pause our typical blog topics to honor the U.S. service members and families whose names became part of our national story by way of the current war.
This NYT article profiles the 13 U.S. individuals who had been killed or wounded as of April 8th. On top of all of the lives lost in this conflict, my heart goes out to these individuals’ families and friends, who will be carrying grief this weekend and always. Obviously, each person was unique and irreplaceable. I have been particularly drawn in by the stories of these three:
– Sergeant Noah L. Tietjens, 42 – survived by his wife, Shelly, and teenage son, Dylan, in Bellevue, Nebraska. They had all taken up martial arts together and Noah dreamed of opening his own studio one day. The NYT says: “Sergeant Tietjens was also a doting father, making sure to cheer on Dylan at his black belt ceremony. When Dylan accepted a special award that night, he asked his father to come onstage so he could dedicate it to him.”
– Sergeant Declan J. Coady, 20 – survived by his parents, three siblings, grandparents and extended family, he would have turned 21 on May 5th. As an Eagle Scout, Declan was deeply committed to serving his community. He earned 56 merit badges! He was a college sophomore at Drake University in Iowa – studying cybersecurity and computer science – and while he could have avoided deploying under an ROTC contract, he chose to stay with his unit. I’ve been thinking a lot about Declan as I watch my own sons work toward their merit badges and imagine all of the possibilities that lie ahead.
– Sergeant First Class Nicole M. Amor, 39 – survived by her husband, Joey, and her 18-year-old son and 9-year-old daughter. This one is especially close to home for me: Nicole lived in a nearby Minnesota town, had a child close in age to mine, and resembles my cousin, who is also a service member and mom. Nicole’s eldest is graduating high school this spring. He had Senior Night earlier this month, and it sure looks like she would have been proud. Her husband continues to share personal tributes to her as well. This excerpt from a recent remembrance has lingered with me:
Every second we don’t get her
for that moment.
Another piece gone.
And no one feels that but us.
We take a day to remember them.
Flags. Beer. Words. Vacations. Silence.
Then everyone goes back to living like nothing is still breaking somewhere.
As if no one is still buried in the lost family that can never be again.
Joey’s words offer a reminder that behind each name are loved ones still living with a profound absence every single day. If you find yourself moved this weekend, you might consider taking a quiet moment to hold these families in your thoughts or looking into one of the many organizations that offer ongoing support to Gold Star families.
Have a safe and enjoyable holiday weekend. Our blogs will be back on Tuesday.
The Financial Times recently reported that the New York Stock Exchange is turning an old vault into an invite-only social club. The launch resurrects a famous perk that existed from 1898 until 2006. Ironically, electronic trading contributed to the demise of the old club, while the vault being used for the new club was previously used to store stock certificates – electronic trading giveth, and electronic trading taketh away. This MSN article speculates on some of the motivations:
There is an interpretation in Wall Street that this strategy was devised to counter Nasdaq, which has been challenging the NYSE’s dominance. . . . The FT stated, “Although the NYSE claims the creation of the social club is unrelated to large IPOs, it involves a pride competition with Nasdaq and listing fees in the hundreds of thousands of dollars annually.” Nasdaq also has its headquarters in Manhattan, New York, alongside the NYSE. However, it operates electronically and does not have a separate trading floor where traders are stationed or events like opening bells are held, unlike the NYSE.
Additionally, the plan includes creating a networking hub within the building for industry giants to counter the Texas Stock Exchange, which is set to open this year and positions itself as a ‘rival to Wall Street.’ The Texas Stock Exchange, in which global financial giants like Goldman Sachs and JPMorgan are investors, has emerged as a rising power threatening the New York exchanges.
The FT article says that the NYSE Group president will have the final say on who makes the cut for this exclusive venue. If anyone reading this is on that list, more power to you (literally)! This sounds like the type of place where I would be anxious about using the wrong fork.
Most securities lawyers have experienced, at least a few times, the sinking feeling of realizing that a filing deadline may have been missed. The panic results not just from our inherent rule-following tendencies, but also because the error might cost the company its ability to use Form S-3, which (when available) affords a variety of useful accommodations that make it easier to access public capital in a rapidly shifting market.
Through the years, we’ve fielded desperate posts on our Q&A Forum about waiver requests and nightmare scenarios of missing filings by one minute for technical reasons. Now, a welcome solution may be in the works! Among the other proposed amendments that I highlighted earlier this week, the SEC’s proposal on registered offering reform includes this nugget on page 49:
Consistent with the Commission staff’s current practice of not objecting to use of Form S-3 when an untimely filing has been made under certain limited circumstances, we also propose to amend the form’s instructions to provide that an issuer would remain Form S-3 eligible notwithstanding an untimely filing having been made during the relevant lookback period so long as: (a) the filing was made within seven calendar days of the original due date (where 17 CFR 240.12b-25 (“Rule 12b-25”) applies, the seven calendar days would be calculated from the filing’s original due date and not from the end of the time period prescribed under Rule 12b-25) and (b) the issuer made only one untimely filing during the relevant lookback period. We want to encourage issuers to make their Exchange Act filings on a timely basis. At the same time, however, we believe loss of Form S-3 eligibility can be a disproportionately harsh consequence for a single untimely filing during a 12-month period. Accordingly, we propose to permit issuers to remain Form S-3 eligible when the conditions described herein are satisfied. We believe a seven-day period provides a reasonable amount of time to file the missed report or other material while helping ensure investors receive necessary information within a reasonable timeframe.
The footnotes to this excerpt explain that:
– If an issuer attempts to rely on Rule 12b-25 but is unable to comply with the requirements of that rule, the seven calendar days would be calculated from the filing’s original due date and not from the end of the period prescribed under Rule 12b-25. If, on the other hand, an issuer complies with Rule 12b-25 with respect to a report, such report is deemed to be filed on the prescribed due date and, therefore, the issuer would not need to rely on the seven-calendar-day grace period described in this section.
– If the seventh calendar day falls on a Saturday, Sunday, or holiday, the report or other material would need to have been filed no later than the first business day immediately following the Saturday, Sunday, or holiday. Under General Instruction G.(3) of Form 10-K, a reporting issuer subject to the proxy rules may omit Part III information from the Form 10-K if that information is included in the issuer’s proxy statement filed with the Commission within 120 calendar days after the fiscal year end. This instruction treats the omitted Part III information as timely filed on the Form 10-K due date. If the issuer fails to file this information with its proxy statement or fails to amend its Form 10-K within 120 calendar days, the Form 10-K is considered untimely. The proposed seven-day period would apply only to the original Form 10-K due date and not to the additional 120- day period provided by General Instruction G.(3).
Thanks to John and Weil’s Howard Dicker for flagging this Easter Egg!
We’ve recently posted another episode of our “Understanding Activism with John & J.T.” podcast. This time, J.T. and John were joined by Bill Fiske, who leads Georgeson’s M&A and Contested Situations Group, and David Farkas, who serves as Head of Investor Intelligence, North America for Computershare. Bill and David discussed some of the key findings in Georgeson’s Global Activism Report. Topics covered during this 23-minute podcast include:
– Factors driving the 2025 environment and activists’ response
– The changing mix of activist objectives in U.S. campaigns
– How activists are adapting their stake building strategies to the changing environment
– How the decline of ESG activism in the U.S. has shifted activist messaging
– The behavior of large index and quasi index investors in contested U.S. elections
– Common mistakes boards make when responding to early activist engagement
This podcast series is intended to share perspectives on key issues and developments in shareholder activism from representatives of both public companies and activists. We continue to record new podcasts, and they’re full of practical and engaging insights from true experts – so stay tuned!
