August 30, 2010

The SEC Comment Process: What is a “Bedbug Letter”?

A member recently emailed me about this SEC Staff comment letter, surprised that the Staff would refuse to process a registration statement due to its material deficiencies – and that the Staff would make a referral to the Enforcement Division if the registration statement would approach going effective.

Internally in Corp Fin, this type of letter is called a “bedbug” letter and these have routinely been issued for decades to registration statements that are filed with problems so large that it would be a waste of Staff time to write up comments. The standard language in the bedbug letter hasn’t varied at all over the years – perhaps the threat to make the Enforcement referral should be stated overtly rather than implicitly, particularly in this case where the addressee is in China…

Shareholder Engagement: UK Style

Recently, as noted in this ISS Blog, the United Kingdom’s Financial Reporting Council (FRC) released a “Stewardship Code” that includes principles on how institutional investors should engage with portfolio companies after collecting comments from a variety of market participants on potential approaches to fostering dialogue between investors and issuers.

The code includes principles on: the monitoring of investee companies; the escalation of activities taken to protect or enhance shareholder value; collective engagement; voting policy; managing conflicts of interest; and public reporting and reporting to clients.
The FRC is encouraging institutional investors to report publicly on the extent to which they follow the code and intends to list all those who have done so.

Meanwhile, the UK Future of Banking Commission recently issued this “British Commission Report on Banking and the Financial Crisis.”

The Mad Rush: Three Weeks Until the “5th Annual Proxy Disclosure Conference”

As happens so often, there is now a mad rush for folks to register for week of proxy disclosure and executive pay conferences that starts in three weeks – on Monday, September 20th. With an aggregate of over 50 panels, if these conferences don’t help get you prepared for the upcoming proxy season of change, nothing will. You can either register for the three days of the “18th Annual NASPP Conference” (in Chicago) – or the two days of the “5th Annual Proxy Disclosure Conference” & “7th Annual Executive Compensation Conference” (in Chicago or by video webcast) or a combination of both. Note that we just extended the length of the last panel of the” 5th Annual Proxy Disclosure Conference” to cover proxy access in more depth. Register Now.

– Broc Romanek