October 17, 2011

Corp Fin Issues “Legal & Tax Opinion” Staff Legal Bulletin

On Friday, Corp Fin issued Staff Legal Bulletin No. 19 that provides guidance on Legality and Tax Opinions in Registered Offerings. Stan Keller of Edwards Wildman Palmer notes:

The Corp Fin Staff has long had internal guidance on legal opinions that made its way around to some people on the outside. This is the first time the Staff has made opinion guidance available publicly. Not only does issuance of the guidance increase transparency that will be helpful to practitioners, both as to Exhibit 5 legality opinions and Exhibit 8 tax opinions, it updates the Staff’s positions to reflect current opinion practice and to address some specific issues.

For example, the guidance addresses opinions on interests in non-corporate entities and recognizes the necessary flexibility to deal with the unique aspects of these entities. The guidance also shows flexibility in dealing with the difficulties of providing Exhibit 5 opinions in continuous or frequent medium-term note (MTN) programs and sets out one alternative for handling opinions in these programs. The Staff is to be applauded for developing this updated guidance that accomodates the federal securities law requirements for opinions with prevailing opinion practice and the practical needs of particular securities offerings.

Corp Fin Issues Cybersecurity Risk Disclosure Guidance

Last Thursday, Corp Fin issued the second installment of its new type of informal written guidance – “CF Disclosure Guidance: Topic No. 2 – Cybersecurity” – to direct companies to review, on an ongoing basis, the adequacy of their cybersecurity risk disclosures (here’s a blog about the first installment).

The cybersecurity guidance doesn’t create new standards – and other than a few accounting cites, it doesn’t really add anything new to what was covered in this blog (and this Sullivan & Worcester memo cited in it). But now that Corp Fin has articulated standards in this new guidance, the expectations of providing disclosure in this area should rise akin to the higher expectations (but perhaps not the reality) after the SEC’s climate change guidance came out in February. Thanks to Jim Brashear of Zix Corp and Howard Berkenblit of Sullivan & Worcester for their input.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– More on “Putting an Overall Pricetag on XBRL”
– The Need for Continuing Disclosure by Private Companies
– Second Circuit: Rating Agencies Are Not “Underwriters” Under the ’33 Act
– Galleon and the Recent Scrutiny of Expert Networks
– Fraudulent Private Placements: Court Finds Distinction Between Broker and Underwriter
– Even More on “Insider Trading Analysis of Sokol Charges”

– Broc Romanek