July 1, 2003
While Broc is enjoying the
While Broc is enjoying the wild west (Yellowstone) with his family this week, a lot has already happened on the SEC front.
Section 16. First, yesterday, June 30th, was the effective date for mandatory electronic filing and website posting of Section 16(a) reports. Not only did the SEC make this requirement effective one month earlier than required by Sarbanes-Oxley, but in doing so they also created a new online filing service that is intended to simplify the filing process for Section 16 reporting persons. There are still some kinks being worked out in the new online system (the SEC is planning an upgrade to the system at the end of July), but this system is streamlining the filing process and hopefully making the insider transaction information reported more accessible to the general public.
SEC Staff indicated that on each of Friday and Monday they received about 500 electronically filed Forms 4. The Staff also indicated that the Commission rejected paper Section 16 filings it received on Monday (about 250 in total).
NYSE/Nasdaq Rules. In addition, and after much anticipation, yesterday the SEC approved new rules proposed by NYSE and Nasdaq that expand the shareholder approval requirements for equity compensation plans for NYSE- and Nasdaq-listed issuers. As expected, these new rules became effective yesterday, June 30th (on an accelerated basis). In the same release, the SEC also approved a change in the NYSE Rule 452, eliminating the ability of brokers to vote shares held in “street name” on equity compensation matters (at least those below the 5% dilution threshold level, deemed to be “routine” matters under the prior rule) unless the beneficial owner of the shares has given the broker specific voting instructions with respect to the plan proposal. This broker voting rule has a 90-day transition period prior to becoming effective, meaning that it will be effective for shareholder meetings that occur on and after September 28, 2003. The SEC release on these shareholder approval and broker voting matters is located at http://www.sec.gov/rules/sro/34-48108.htm.
Sharon J. Hendricks