February 8, 2013

8 Law Firms Issue Consensus Memo on Iran & Syria Disclosures

Last night, eight law firms joined to issue this report on 13 open issues related to the Iran Threat Reduction and Syria Human Rights Act as the first time that companies need to provide disclosure under this new law draws nigh. A number of the answers in the memo address the “affiliate” issue that I raised in this blog earlier this week…

By the way, 4 companies have already filed “IRANNOTICES” with the SEC, per this Edgar search

A Magic Number? How Many Firms Does It Take to Reach a Consensus?

First of all, let me commend those brave souls who have taken the lead to get law firms together to issue a consensus firm memo – as well as those tasked within each firm to help negotiate its language. This is no easy job – and I imagine it involves hours and hours that are not billable (and perhaps some hurt feelings to boot). Kudos!

The notion of a consensus memo is a relatively new phenomenon – I believe the first one was issued in October ’02 in the wake of Sarbanes-Oxley regarding Section 402 and insider loans. And there have been a handful more since then. I believe this new one with eight is the fewest number of firms to join together in harmony.

Anyways, I got to wondering how many firms does it take to reach a consensus? What is that magic number? Is five too few? Send me your feedback. I believe there hasn’t been any caselaw relying – or deciding not to rely – on any of the consensus memos pushed out over the past decade.

NYSE Submits Schedule 13F Rulemaking Petition Seeking Quicker & More Frequent Reporting

A few days ago, the NYSE submitted this rulemaking petition to the SEC seeking to amend the Section 13(f) beneficial ownership reporting rules, including shortening the current 45-day reporting deadline for Schedule 13Fs so that reporting is required 2 days after the quarter ends – as well as pushing for a reporting requirement on a monthly basis rather than the existing quarterly framework. The Society of Corporate Secretaries and NIRI co-signed the petition, as more frequent reporting would assist companies to determine who their larger shareholders are for engagement and vote projection purposes.

As noted in this recent webcast, rulemaking petitions don’t carry any special weight typically – so I found it unusual for the NYSE to submit a petition given that it is in frequent direct contact with the SEC. Over the past decade – which is how long petitions have been posted online – the NYSE and Nasdaq have only submitted one petition each – and both of those were fairly insignificant (one to extend a implementation date deadline and one to seek equal treatment among the two exchanges). It is possible that someone at the SEC asked the NYSE to file the petition as a way to test the waters – or maybe this is a new approach for the exchanges to seek regulatory changes…or none of the above…

– Broc Romanek