February 25, 2010

SEC Issues Proxy Solicitation Rule Corrections: Impact on Your Form 10-K

Yesterday, the SEC issued this technical corrections release related to its proxy disclosure enhancement rules adopted in December (actually the release was posted Tuesday – taken down for a while – and then reappeared Wednesday morning). The release corrects Forms 10-Q and 10-K to retain the current numbering of the items appearing in each form to avoid confusion that might otherwise arise from references to the numbering from other rules, etc.

So what does this mean for your Form 10-K? For Form 10-Ks filed on or after this Monday – March 1st (actually, it’s filings until 5:30 pm EST on Friday – even though filings are accepted until 10 pm, they are considered filed the next business day) – the title and substance of Part I – Item 4 should be deleted, the word “Reserved” should be inserted in the place thereof and the remaining items of Form 10-K should not be renumbered.

In addition, the SEC made three changes to Form 8-K, including adding an instruction that corresponds to an instruction contained in Forms 10-Q and 10-K that allows certain wholly-owned subsidiaries to omit the disclosure of shareholder voting results and to amend the regulatory text to make it consistent with the discussion of the amendments to that form contained in the adopting release.

NYSE: Annual Corporate Governance Letters Now Available

Last week, the NYSE issued its annual corporate governance letters – one for domestic companies and one for foreign private issuers.

RR Donnelley Buys Bowne: You May Lose Your Free Lunch

As a former employee of RR Donnelley (I launched for them when it was a different type of site), I closely follow the financial printer industry. Thus, I wasn’t surprised to see Donnelley’s announcement that it had bought Bowne yesterday.

As the printers have been struggling for quite some time, I had expected industry consolidation long ago. It will be interesting to see whether this will have an impact on the “freebies” for lawyers and bankers. I would imagine that narrowed margins for the industry and less competition in the space will combine to make that so. No more fifty-yard line…

SEC Adopts An Alternative Uptick Rule

At an open Commission meeting yesterday, the SEC voted 3-2 to adopt a new uptick rule, one that has a circuit breaker restriction on short sales in stocks that experience a price decline of 10% or more from the prior day’s close. The uptick rule had been eliminated in July 2007 amid some controversy. Commissioners Casey and Paredes strongly opposed the new rule. The new rule will be effective 60 days after the publication of the release in the Federal Register – but it will then have a six-month implementation period (so essentially it will be 8 months until the rule takes effect).

Under the new rules, once the circuit breaker is triggered for a stock, short selling in that stock will only be allowed at prices above the current national best bid for the rest of the trading day as well as the following trading day, subject to certain exemptions. However, the SEC did not adopt an exemption for bona fide market making activity.

– Broc Romanek