May 19, 2010

Dodd Bill: The Latest on the Regulation D Amendment

As I’ve been blogging, one of the battles in the Senate has been over the future of Regulation D (as strange as that is) – as I blogged yesterday, it looks like there is now closure on that issue for the Dodd bill. Here is the latest from Alan Parness of Cadwalader:

Regarding the proposed amendments to Sections 412 and 926 of S. 3217 introduced by Senators Bond et al last Thursday as SA 4037, such amendments have been supplanted by new amendments introduced on Monday by Senator Bond et al, as SA 4056, and those amendments were passed by voice vote of the Senate that evening. Here’s SA 4056 and its record from the Thomas (Library of Congress) website.

By my read of SA 4056, I noticed only a few minor changes to Sections 412 and 926 from the versions in SA 4037. Note that while the SEC’s initial review and adjustment of the definition of “accredited investor” in accordance with Section 412(b)(1) appears to be optional [“The Commission may undertake a review . . .”], Section 412(b)(2) mandates that the SEC undertake reviews of the definition every 4 years thereafter, but solely as regards the definition of the term in 17 CFR Sec. 230.215 (Rule 215 under the ’33 Act for purposes of the definition of “accredited investor” in Section 2(a)(15)(ii) and, in turn, the Section 4(6) exemption), but not as regards the definition in Rule 501(a) of Reg. D. The version of Section 412 in SA 4037 made no such distinction between the rules.

Of course, what remains to be seen is what the SEC does in accordance with the rulemaking directives of Sections 412 and 926, if those provisions are ultimately enacted in the versions set forth in SA 4056.

Coming Soon: The Next Phase-In for XBRL

Over the next several months, companies will face additional implementation milestones to provide XBRL-tagged financial statements with their SEC filings. For financial statements for periods ending on or after June 15th, the largest companies (ie. first phase-in group) must provide detailed tagging for financial statement notes and schedules as an exhibit to their filings.

Concurrently, all other domestic and foreign large-accelerated filers using US GAAP (second phase-in group) must submit their first XBRL-tagged financial statements. This memo from KPMG summarizes guidance from a recent SEC Staff webcast that covered detailed tagging phase-in requirements, rules about changes in filing status during the three-year phase-in period, and other implementation issues.

May-June Issue: Deal Lawyers Print Newsletter

This May-June issue of the Deal Lawyers print newsletter was just sent to the printer and includes articles on:

– Loyal to Whom? Recent Delaware Decisions Clarify Common Stockholders Are Primary Beneficiaries of Directors’ Fiduciary Duties
– Recent Trends in Earnout Use: A Cautionary Note
– The Shareholder Activism Report: Recommendations to Consider
– Delaware Chancery Opens Door for Next Gen Poison Pill
– More Takeaways from Selectica

If you’re not yet a subscriber, try a 2010 no-risk trial to get a non-blurred version of this issue on a complimentary basis.

– Broc Romanek