October 19, 2012

Transcript Now Available: “Getting Beyond Denial: Conflict Mineral Rules More Important (and Apply Sooner) Than You Thought”

I have posted the transcript for the popular webcast on the SEC’s conflict mineral rules. I believe Corp Fin continues to collect questions ahead of providing some interpretive guidance in this area. Here is a postscript note I added to the transcript about a common question on Form S-3 ineligibility:

Note that the question of whether a late Form SD will impact adversely a registrant’s eligibility to file a new Form S-3 or update an effective Form S-3 for purposes of Section 10(a)(3) remains unresolved.

The Form S-3 eligibility requirements provide that a registrant must be both current and timely. Specifically, Form S-3 is available only to a registrant that (i) has filed all material required to be filed pursuant to Exchange Act Sections 13, 14 or 15(d) for a period of at least twelve calendar months immediately before the filing of the Form S-3; and (ii) timely filed all reports required to be filed during the twelve calendar months and any portion of a month immediately preceding the filing of the Form S-3. For purposes of Form S-3, the SEC staff historically has interpreted these “reports” and “materials” to include only Sections 13(a) and 15(d) reports and Sections 14(a) and 14(c) materials. See Securities Act Forms C&DI 115.04.

Because the new Form SD is prescribed by Exchange Act Sections 13(p) and 13(r) and the rules promulgated thereunder, it is arguable that a late Form SD should not impair Form S-3 eligibility (and, thus, also not make the registrant an “ineligible issuer” under Securities Act Rule 405 or cause the public information requirement under Securities Act Rule 144(c) not to be satisfied). The SEC Staff has been asked for its views on this question, but to date the Staff has not weighed in with definitive guidance. Hopefully this topic will be in addressed in any Staff guidance issued on the new Form SD filing rules.

Note this Cooley news brief about the pressure these rules are placing on smelters and refiners.

JOBS Act: FINRA Adopts Changes Research Analyst Rules

Last week, the SEC published a FINRA rulemaking that changes Rule 2711 and incorporates NYSE Rule 472 to conform to the JOBS Act so that EGCs can raise capital with reduced restrictions related to communication between EGCs and research analysts at investment banks and eliminate the research quiet period after an EGC’s IPO or secondary offering.

As noted in this White & Case memo, the rule amendments are effective immediately with retroactive effect to April 5, 2012 (with an exception to retroactive implementation for the termination of the restriction on publishing research for 10 days after a secondary offering by an EGC and on publishing research during the 15 days following the termination of a lock-up agreement related to an EGC; this is not retroactive since it’s not JOBS Act-related). We have posted memos in our “Analyst Research” Practice Area – and here is a MarketWatch article noting how these rules may bring back conflicts…

The PCAOB’s Roundtable on Auditor Independence & Rotation

Yesterday, the PCAOB posted statements from the speakers ahead of its auditor independence and rotation roundtable that was held yesterday.

– Broc Romanek