July 18, 2006

Survey Results on Free Writing Prospectuses

Below are the results of our Quick Survey on free writing prospectuses:

1. Since ’33 Act reform became effective, the most pieces included in a “disclosure package” in a deal that I have worked on has been:

– 1 piece – 4.6%
– 2 pieces – 22.7%
– 3 pieces – 27.3%
– 4 pieces – 40.9%
– 5-6 pieces – 4.6%
– 7 pieces or more – 0.0%

2. Since ’33 Act reform became effective, the average number of pieces included in the “disclosure packages” in deals that I have worked on has been:

– 1 piece – 13.4%
– 2 pieces – 45.5%
– 3 pieces – 36.6%
– 4 pieces – 4.6%
– 5 pieces or more – 0.0%

On the question of which free writing prospectuses is the most interesting, we had a clear-cut winner with 75% of the vote: Chipotle’s IPO road show with all those catchy songs!

New Survey on Executive Sessions

Now it’s time to participate in our new Quick Survey, this one is an Executive Session Survey. Please answer four quick questions on the frequency of board’s executive sessions; frequency of audit committee executive sessions; who’s in the room during an audit committee executive session, and who meets with the audit committee in executive session.

Japan’s Proposed Corporate Governance Reform

Recently, Japan’s regulator – the Financial Services Agency – has proposed steps that would improve the infrastructure involving their capital markets and likely make them more competitive. This has included steps to strengthen the quality of their audits, as described in this WSJ article and this Financial Times article.

In these significant FSA proposals, Japan proposes to enhance protection for investors through such steps as:

– Broading the definitions of investment schemes including financial instruments

– Enhancing disclosures through quarterly reporting, reporting on internal controls by management and auditors, and reviewing regulations on tender offers

– Increasing penalties against market fraud

– Providing for self regulatory structures