Yesterday, ISS announced the launch of its Annual Global Benchmark Policy Survey, which ISS notes is “a key component of its annual policy development process exploring potential voting policy changes for 2027 and beyond” and will gather views on “governance and other topics relevant to shareholder voting decisions” from institutional investors, public companies, corporate directors and other interested market constituents.
The survey (links to a full PDF version) includes questions related to the following topics for U.S. markets:
– When board slate elections (where multiple directors are presented as a single voting item) should be considered a governance concern warranting opposition
– The impact of director tenure on independence and how many years is problematic (10+, 12+, 15+, 20+ or something else)
– Changes to a company’s incorporation jurisdiction or governing documents (how to balance benefits the company identifies with changes to shareholder rights)
– Whether to change ISS’s “perpetual withhold” policy when companies maintain certain problematic governance practices after IPO (e.g., multi-class share structures) and which board members an adverse vote recommendation should apply to
– The potential introduction of semi-annual reporting and the possible implications (whether semiannual reporting is not a concern, a positive change, a negative change or something that makes sense for smaller or pre-revenue revenue companies only)
– Whether discretionary bonus programs warrant different sector-specific treatment for financial services companies rather than generally being treated as a concern in the qualitative pay-for-performance evaluation since financial services companies indicate that formulaic bonus structures are incompatible with applicable regulatory and risk management requirements
– How to signal significant concerns regarding executive pay when no say-on-pay vote is on the ballot given that more companies may be exempt if the SEC’s “Filer Status” proposal is adopted (e.g., whether to vote against compensation committee members and which members) and what support level for compensation committee members should be considered a low vote that triggers ISS’s responsiveness policy (the 50% director election threshold or the 70% say-on-pay threshold)
– Whether and when the risk of competitive harm constitutes a compelling rationale for not disclosing forward-looking LTI performance targets
– The appropriate shareholder response when companies reduce their climate-related disclosures due to changes in regulatory reporting requirements or risks
– Whether it is appropriate to expect companies with significant exposure to nature-related risks to disclose information according to a recognized framework like TNFD
The survey is scheduled to close on August 14, 2026, at 5 p.m. ET. In addition to the survey, ISS will conduct a series of regional, topic-specific roundtable discussions.
Yesterday, the Corp Fin Staff issued new Securities Act Rules CFI 260.40 extending the application of the March 2025 Latham no-action letter to Rule 506(c) offerings of tokenized securities that use digital attestations to verify accredited investor status. Here’s the full text of the CFI:
Question: An issuer intends to conduct a Rule 506(c) offering of a tokenized security using the reasonable steps to verify accredited investor status described in the Division’s letter to Latham & Watkins LLP (March 12, 2025). The issuer intends for investors to provide representations to the issuer regarding their accredited investor status and the financing of their minimum investment amount programmatically through the tokenized security via a digital attestation. Does the staff view this as a satisfactory method of providing representations to the issuer for purposes of the position taken in the Latham & Watkins letter?
Answer: Yes. The staff notes that it will be important for the issuer to ensure that it retains sufficient records of the process used via the token standard protocol to verify accredited investor status. See Securities Act Release No. 9415 (July 10, 2013) (noting that “it will be important for issuers and their verification service providers to retain adequate records regarding the steps taken to verify that a purchaser was an accredited investor”).
Issuers are also reminded that whether an issuer has taken reasonable steps to verify that a purchaser is an accredited investor is an objective determination by the issuer (or those acting on its behalf), in the context of the particular facts and circumstances. See Securities Act Release No. 9415 (July 10, 2013); and Securities Act Rules CFIs 256.35 and 256.36. [July 21, 2026]
Dave’s reference to the phrase “if it’s free, it’s for me” in a blog last week reminded me of a continuing ed program my mom attended in Chicago for dental hygiene credit when I was nine years old. It’s a weird thing to remember, but it had quite an impact on our household. For starters, whatever my mom learned there caused her to become a vegetarian. (And vegan briefly. While I aspire to a plant-based diet now, at the time, that meant my brother and I ate cereal for dinner for a few months.) Plus, the speaker (who was vegan) had a favorite saying that got a lot of “airtime” in our house: “What’s the best kind of food? Free food!” (Meaning, even though he ate plant-based all other times, he would gladly partake in animal products when free.) I guess we all really love free stuff!
Luckily, with tomorrow’s FREE webcast, you don’t need to compromise your chosen diet or anything else! Our speakers will be serving up information you need to know on the SEC’s Registered Offering Reform proposal, including real-world implications, areas of uncertainty, and key issues to watch as the SEC’s proposal moves toward adoption. Good for your pocketbook, your career and your clients!
So, whether you’re a member or not, tune in tomorrow at 2:00 pm Eastern for our webcast “The SEC’s Registered Offering Reform Proposal: What You Need to Know Now” to hear from Valian Afshar, Chief, Office of Rulemaking in the SEC’s Division of Corporation Finance, Sonia Gupta Barros, Partner at Sidley, Edwin O’Connor, Partner at Goodwin, Ted Yu, Associate Director (Specialized Policy and Disclosure) in the SEC’s Division of Corporation Finance, and Dave Lynn, Partner at Goodwin and Senior Editor here at TheCorporateCounsel.net.
Topics include:
– Key changes to Form S-3 eligibility
– Expanded communications flexibility
– Modernization of registration processes and shelf offerings
– Impacts on capital-raising strategy
– Transition timing, open questions and practical implementation considerations
Current members of TheCorporateCounsel.net automatically have access. Non-members can register for the free stream here. (The on-demand version of the webcast will only be available to current members.)
As usual, we will apply for CLE credit in all applicable states (with the exception of SC and NE, which require advance notice) for this one-hour webcast. You must submit your state and license number prior to or during the live program. Attendees must participate in the live webcast and fully complete all the CLE credit survey links during the program. You will receive a CLE certificate from our CLE provider when your state issues approval, typically within 30 days of the webcast. All credits are pending state approval.
This program will also be eligible for on-demand CLE credit when the archive is posted, typically within 48 hours of the original air date. Instructions on how to qualify for on-demand CLE credit will be posted on the archive page.
Last Friday, Dave blogged about the SEC’s new e-delivery rulemaking proposal, which would permit, but not require, covered entities to use e-delivery as the default method of delivery for covered information under specified conditions. This Morgan Lewis alert goes into detail on what the proposed Regulation E-Delivery would mean for “covered entities.”
“Covered entities” are “virtually every entity with SEC-mandated delivery obligations,” including public companies.
“Covered information” is “information required to be delivered under the Securities Act, Exchange Act, Investment Company Act, Advisers Act, Trust Indenture Act, or other federal securities laws,” including “prospectuses, proxy statements, annual reports, shareholder reports, trade confirmations, Form CRS, privacy notices, investment adviser brochures, and tender offer materials.”
Two permissible methods of delivery include direct delivery and a statement of availability.
For materials that do not contain personal financial information (PFI), covered entities would be permitted to deliver the materials directly to an electronic address, such as via email attachments, documents embedded in emails, or a similar direct electronic transmission.
Reg E-Delivery generally would disallow direct email delivery for materials containing PFI. Instead, covered entities would be permitted to send a statement notifying recipients that materials are available through a secure website after completion of a process reasonably designed to protect personal financial information (e.g., password authentication). This approach also could be used for materials that do not contain PFI [. . .]
Covered entities generally would be required to:
– provide prominent disclosure regarding electronic delivery;
– permit recipients to opt out at any time;
– provide paper copies upon request free of charge;
– permit recipients to update their electronic address without charge;
– maintain written procedures to identify and remediate failed electronic deliveries;
– maintain website availability standards for electronically delivered materials; and
– comply with specified content, timing, and formatting requirements for electronic communications.
In the next blog, I’ll share specifics regarding the delivery of proxy materials and prospectuses.
The Morgan Lewis alert also discusses how Regulation E-Delivery, if adopted, would change the delivery of proxy materials and prospectuses. For proxy statements, it explains:
Currently, Exchange Act Rule 14a-16 generally permits issuers to satisfy proxy delivery obligations by either mailing a “full set” of proxy materials (either in paper or electronically for shareholders who previously opted in) or using the SEC’s “notice-and-access” model, under which shareholders receive a paper Notice of Internet Availability directing them to proxy materials posted online.
If adopted, Reg E-Delivery would eliminate the paper Notice of Internet Availability as a standalone delivery method and move issuers to a default e-delivery of proxy materials through Reg E-Delivery’s permitted delivery methods. Shareholders could opt to receive a full set of proxy materials in paper, which would be the only alternative to e-delivery under the proposed rules. Reg E-Delivery also would eliminate the longstanding prohibition on using the notice-and-access framework for business combination proxy solicitations, thereby extending electronic delivery to transactions that historically required delivery of a full paper set of proxy materials.
For prospectuses:
Reg E-Delivery does not replace Rule 172 (i.e., “access equals delivery”), which permits many issuers and other offering participants to satisfy the final prospectus delivery obligation via the filing of the final prospectus on EDGAR. The adoption of Reg E-Delivery would provide another avenue for issuers for e-delivery, including with respect to offerings that are excluded from relying on Rule 172, such as offerings on Form S-8 and the corresponding requirement to distribute Section 10(a) prospectuses. In this regard, the proposed rules may significantly ease the burden on issuers to provide paper copies to former employees and other participants in employee benefit plans who do not have access to company email.
Under the proposed rules, an issuer could satisfy many Securities Act delivery obligations electronically without first obtaining affirmative consent, provided that
– the investor has supplied an electronic address;
– the issuer has provided the required disclosures regarding electronic delivery; and
– the investor has not opted out of electronic delivery.
Note that Reg E-Delivery would not change substantive Securities Act prospectus delivery obligations. Rather, it would change the way those obligations may be satisfied. Issuers could choose to continue delivering paper prospectuses, and shareholders would retain the right to receive paper copies free of charge.
Last week, Dave dedicated a few blogs to addressing how our upcoming 2026 Proxy Disclosure and Executive Compensation Conferences will cover the rapidly unfolding SEC regulatory agenda that we expect will be playing out in real time as we assemble in Orlando on October 12th & 13th. With our early bird rate expiring this Friday (!!!), I wanted to highlight a few other panels that will help you understand how that evolving regulatory agenda might impact your 2027 proxy season, so you can see the value that you can get out of attending our conferences before that early bird rate expires.
– In “Trends in Tokenization & Blockchain,” our speakers, DLA Piper’s Era Anagnosti, Nasdaq’s Eun Ah Choi, Cooley’s Reid Hooper and Fenwick’s Ryan Mitteness, will bring us up to speed so we’ll all be able to speak confidently about the tokenization of securities and why it matters to public companies. Tokenization is quickly moving from concept to reality, and, as Liz said, it’s time to start paying attention.
– In “Shareholder Engagement & Proxy Voting: Turning Tides,” Davis Polk’s Ning Chiu, ExxonMobil’s David Kern, Jasper Street Partners’ Rob Main and Tumelo’s Edd Micklem will explore how stewardship, engagement and proxy analysis are changing and what the changes mean for companies as they engage with investors and prepare for proxy season.
– In “Bodyguards & Private Jets: Perks on the Radar,” Compensia’s Mark Borges, Davis Polk’s Kyoko Takahashi Lin and Sidley’s Corey Perry will tackle the latest developments in perks disclosure and where any rule amendments might be headed.
– Finally, to conclude day two, we’ll get to hear from representatives of ISS and Glass Lewis, Kevan Marvasti and Hannah Fasbender in our always popular panel, “Navigating ISS & Glass Lewis,” moderated by Davis Polk’s Ning Chiu.
Go check out our full agenda and speaker bios because I don’t have room to highlight all our panels here. I’m also super excited about the topics and speakers for our panels “Fireside Chat with Top Activism Defense Lawyers,” “Scary Stories to Tell in the (Securities Law Conference Spot)light,” “Keeping Governance In Focus When the Future Is Hazy” and “The Top Compensation Consultants Speak.”
Our early bird rates include discounts on both in-person and virtual attendance, so register online at our conference page or contact us at info@CCRcorp.com or 1-800-737-1271 before it expires this Friday, July 24!
As John previously shared, Corp Fin recently released new CFIs addressing beneficial ownership reporting, the proxy rules, Regulation Crowdfunding & the tender offer rules. John provided a brief summary of each new CFI in his blog, and now I thought we’d do a bit of a deeper dive on some of the more interesting ones. Starting with the CFIs on Rule 13d-3, here’s more info from Alan Dye’s Section16.net Blog on Questions 105.08, 105.09 and 105.10, which “address the circumstances under which a holder of a total return swap (TRS) would (or would not) be deemed the beneficial owner of shares of the reference security held or acquired by the bank counterparty to hedge its position” and “address indirectly the more pressing concern whether ownership of a TRS could cause the holder to become subject to Section 16 as a ten percent owner.”
Consistent with the SEC’s 2023 guidance included in the release adopting amendments to the Section 13(d)/(g) rules, Question 105.08 confirms that a party does not acquire beneficial ownership of the reference securities, including any securities the counterparty may hold to hedge its risk, if it enters into a standard TRS that settles exclusively in cash, only refers to a class of equity securities (as described in Rule 13d-1(i)(1)) for purposes of identifying a reference security, and does not confer any voting or investment power with respect to, or any right to acquire, any securities. The CFI helpfully addresses an ambiguity noted in my blog about the recently issued BofA no-action letter (addressing whether a TRS holder and its counterparty are a “group”). Question 105.08 also confirms that:
– Entry into a TRS, absent any arrangement that confers such power or rights outside of the terms of the swap, is not, by itself, evidence of a plan or scheme to evade the reporting requirements of Section 13(d) or 13(g) for purposes of Rule 13d-3(b).
– Entry into a TRS solely for economic exposure to the reference security, without more, also does not prevent the vesting of, or create a false appearance regarding, beneficial ownership as part of a plan or scheme to evade.
Question 105.09 confirms that entry into a TRS would confer beneficial ownership pursuant to Rule 13d‑3(b) only if it was used in connection with an “arrangement” to prevent the vesting of beneficial ownership by the holder as part of a plan or scheme to evade the reporting requirements of Section 13(d)/(g). For example, the Staff said, if a person uses a TRS as a means to direct the counterparty how to vote its hedge securities or to pre-arrange the acquisition of hedge securities, the person may be deemed a beneficial owner under Rule 13d-3(b).
Finally, Question 105.10 confirms that the Staff remains committed to the position articulated in its “amicus letter” to the district court in the CSX case that the “mental state” contemplated by the term “plan or scheme to evade” is “generally the intent to enter into an arrangement that creates a false appearance or an illusion contrary to the actual facts.” In the context of a TRS, the analysis should focus on “whether the person knew or was reckless in not knowing that use of the total return equity swap would create a false appearance or illusion that the person’s interest is economic alone.” For example, the Staff said, entry into a TRS “for the purpose or effect of indirectly acquiring the power to vote or a future right to acquire the reference equity security may be viewed as part of” a scheme to evade.
The “grab bag” also includes CFIs on activist fund structures and Schedules 13D and 14A. This Cleary blog explains:
The guidance targets a specific but increasingly common activism structure: special-purpose vehicles that raise capital from investors to buy a single issuer’s securities and conduct an activism or proxy campaign. Activists who form these vehicles must now name the underlying investors in their 13D and contested proxy filings.
It also gives specifics on each related CFI:
Under the guidance provided by CFI 110.09, an entity (such as a special purpose vehicle) formed specifically to raise funds to acquire the securities of a specific issuer and engage in an activism campaign at that issuer must disclose the identities of its investors under Item 3 of Schedule 13D (Source and Amount of Funds or Other Consideration). Item 3 requires reporting persons to name all parties to any transaction through which they obtained funds “for the purpose of acquiring, holding, trading or voting the securities” of the issuer. Because investors in a purpose-built vehicle contribute capital for exactly that purpose, filers must identify them in the Schedule 13D filing.
CFI 110.10 confirms that Instruction C to Schedule 13D does not limit the information that must be disclosed about the reporting person itself. Instead, Instruction C identifies additional persons (such as general partners and their controlling persons) about whom Items 2-6 information must also be provided.
It says that many filers had been disclosing only the general partner or manager of the vehicle, and that reading of General Instruction C had some support from case law. It also notes that the CFI doesn’t address the related issue of investment vehicles whose limited partners do not contribute capital earmarked for a specific target.
CFI 155.02 addresses a parallel question applicable to disclosure on Schedule 14A in the context of a contested election. Where an investment vehicle is formed for the purpose of raising funds to acquire securities and engage in a proxy solicitation to change the board composition at a specific issuer, the SEC Staff confirms that investors in that entity who contribute more than $500 are “participants” in the proxy solicitation under Instruction 3(a)(iv) to Item 4 of Schedule 14A. That instruction defines a “participant” to include any “person who finances or joins with another to finance the solicitation of proxies,” excluding only those who contribute $500 or less.
This interpretation aligns with the SEC Staff’s position in CFI 110.09 and extends the same logic to a proxy context.
Last, but not least, new CFIs address the delivery method for required disclosures in issuer and third-party tender offers. This Arnold & Porter alert has more:
Question 104.03 and Question 131.04: Exchange Act Rules 13e-4(e)(1) (issuer tender offers) and 14(d)-4(a) (third-party tender offers) list three methods to publish, send, or give the disclosure required by Rule 13e-4(d) and Rule 14d-6, respectively, to security holders for a tender offer in which the consideration offered consists solely of cash and/or exempt securities.
This requirement may be satisfied by issuing a press release (instead of the summary newspaper advertisement contemplated by the Rules) as soon as practicable on the tender offer’s commencement date through a widely disseminated news or wire service, which contains the disclosure required by Rule 13e-4(d)(3) or Rule 14d-6(d)(2), as applicable, as well as an active hyperlink to a website address where security holders may access the tender offer materials, letter of transmittal (if any), and any other documents relating to the offer, provided that: (i) the tender offer is not subject to Rule 13e-3; and (ii) the issuer or bidder, as applicable, mails or otherwise furnishes promptly the tender offer materials to any security holder who requests such tender offer materials pursuant to the press release or otherwise.
I recently purchased a t-shirt that boldly proclaims “I’m from the 1900s.” As with any other impulsive purchase, I am not sure if I will ever actually wear this shirt, but for some reason that message spoke to me at the time. It evokes a bygone era before we had blogs, e-mail, social media and artificial intelligence models capable of threatening to wipe out humanity. In other words, from afar, those seem like much simpler times. In fact, the electronic communications age had already arrived in force by the 1990s, when the SEC was grappling with the concept of electronic delivery of securities information that was previously transmitted in paper by snail mail. This resulted in a pair of Commission interpretive releases from the mid-1990s that still serve as the operative guidance to this day.
Yesterday, the SEC announced proposed new Regulation E-Delivery, seeking to bring the delivery of materials under the federal securities laws into more modern times. In a statement accompanying the proposal, Chairman Atkins notes:
The world has changed dramatically since many of our rules were first adopted. But, all too often, our regulatory framework has remained static. Default paper delivery results in a constant source of unnecessary expenses that are paid for by American investors and reduce their investment returns. In an age of artificial intelligence and blockchain technology, a default to paper delivery should be a relic, not a standard.
If adopted, Regulation E-Delivery would establish requirements and conditions under which essential information could be delivered electronically to investors and others without first obtaining their affirmative consent to do so. Currently, much of the required regulatory information is delivered in paper form unless the recipient affirmatively elects otherwise. The modernized approach, if adopted, generally would supersede the Commission’s decades-old, guidance-based e-delivery framework while preserving investors’ ability to receive delivery in paper on request. Importantly, it would substantially reduce paper, printing, and postage costs for issuers, intermediaries, and, ultimately, investors.
Under my chairmanship, we will not remain tethered to the tools or the temperament of a bygone era. Regulation E-Delivery is not merely a proposed administrative adjustment; it represents a meaningful advancement toward aligning our rules with the needs of today’s markets.
In a Fact Sheet describing that proposal, the SEC notes:
Currently, many required regulatory disclosures and reports under the federal securities laws are delivered in paper format, unless the person with a right to receive these disclosures and reports affirmatively elects otherwise. Reg E-Delivery, if adopted, would be the Commission’s primary rule addressing e-delivery. It would generally supersede the Commission’s current guidance based e-delivery framework and would permit e-delivery as the default method of delivery to investors, clients, and others subject to certain conditions.
The Commission’s new e-delivery approach is designed to address concerns that issuers, market intermediaries and, ultimately, investors and other recipients of information under the federal securities laws may be bearing unnecessary costs and expenses associated with a default delivery method that no longer reflects the preference of most investors. Further, e-delivery offers the opportunity to provide recipients of required disclosures and reports with potentially more personalized, interactive, timely, and efficient experiences with disclosure than paper delivery. It also provides accessibility and retention benefits. The proposal builds on the Commission’s decades-old e-delivery guidance as well as the Commission’s understanding about investors’ use of and preferences for electronic media, including through recently conducted investor testing surveys.
Proposed Regulation E-Delivery would permit, but not require, covered entities to use e-delivery as the default method of delivery for covered information under specified conditions. The proposed regulation provides that a covered entity could rely on Regulation E-Delivery to satisfy its delivery obligations where: (1) the covered recipient has provided an electronic address; (2) the covered entity has provided a prominent disclosure to the covered recipient that it will send covered information to the electronic address provided; and (3) the covered recipient has not opted out of e-delivery.
Regulation E-Delivery would include a number of general requirements addressing the method and timing of e-delivery, as well as the ability to opt out, the ability to receive a paper version of covered information free of charge upon request. Proposed Regulation E-Delivery would also include specific requirements for those websites where the covered information is provided.
When you think about the fact that the guidance proposed Regulation E-Delivery would replace is from the mid-1990s, it definitely seems that we are due for a change!
