June 29, 2005

Today at the OK Corral…

First up at today’s SEC Open Meeting is the much anticipated Securities Offering Reform project, where the Commission will consider rules that would significantly revise and update the registration, communications, and offering processes under the Securities Act.

Second on the agenda is the shell company rulemaking project, where the Commission will consider adopting rules amending Forms S-8, 8-K, and 20-F, as well as defining the term “shell company” and amending the definition of the term “succession.”

Third, the Commission will consider issues remanded by the D.C. District Court, in the Chamber of Commerce v. SEC decision. The remanded issues relate to (1) the costs of complying with the 75% independent director condition and the independent chairman condition and (2) disclosure alternatives to the independent chairman condition.

Chairman Donaldson’s decision to schedule the last matter has caused considerable controversy. A USAToday article quoted former SEC Commissioner Joseph Grundfest as saying “The long-run implications of such conduct can only be corrosive and unfortunate” and former Commissioner Bevis Longstreth as saying “Such a course of action could easily be construed as an expression of contempt for the rule of law and the judicial process.”

The gunfight starts at 10 am eastern today and will be available by webcast.

Staff Legal Bulletin 14C Posted

Based on their experience with shareholder proposals in the last proxy season, the Staff issued additional 14a-8 guidance yesterday in the form of SLB 14C. The SLB covers issues that arose commonly in the last season, including:

– the application of Rule 14a-8(i)(6) to proposals calling for director independence;

– the application of Rule 14a-8(i)(7) to proposals referencing environmental or public health issues;

– the application of Rule 14a-8(l); and

– the withdrawal of a proposal submitted by multiple shareholder proponents.

Posted by Julie Hoffman