January 6, 2015

Pay Ratio: Is the SEC Adopting Final Rules Next Week?!?

Does Politico suddenly have the inside track at the SEC? That would be a shocker. This excerpt from this article surprised me yesterday:

…the SEC’s commissioners are expected to vote on Dodd-Frank rules as soon as mid-January, sources said, with the most likely candidates being regulations concerning derivatives markets and the law’s controversial “pay ratio” requirement for executive compensation.

The article also handicaps the odds of crowdfunding and other Dodd-Frank rules. Personally, I would fall off my chair if the SEC adopted pay ratio rules next week – but we’ll find out soon enough whether Politico’s “sources” are real. Note that this article from the Washington Examiner notes that a source at the SEC said that finalizing the pay ratio rule was a “top priority” and that “while there is no timetable to finish the rule…it could be done soon.”

As an aside, here’s an article critical of some members of Congress that have asked the SEC to change its budget priorities…

Securities Regulation Legislation in the Coming 114th Congress

Here’s a blog by MoFo’s Nilene Evans:

If the current 113th Congress is any measure, we can expect the coming 114th Congress to introduce and promote bills seeking, among other matters, to facilitate capital formation, to correct oversights in the original JOBS Act, to make crowdfunded equity offerings a reality and to ease reporting complexity for smaller issuers. Here is a link to our chart discussing the bills currently pending. Most of these bills did not progress very far. For example, of the nineteen JOBS Act related bills we tracked, only two — H.R. 4200, “Small Business Investment Company (SBIC) Advisers Relief Act of 2014,” and H.R. 4569, “Disclosure Modernization and Simplification Act of 2013” — were successfully passed in the House. However, regardless of whether they were passed in one chamber, all bills will need to be re-introduced in 2015 There is a reasonable expectation that the new Congress, which will be majority Republican in both Houses, will be able to pass some of these bills and present them to the President for signing. We look forward to an interesting 2015 in securities regulation.

Also see this Reuters article on the potential rollback of Dodd-Frank rules in 2015. And this article entitled “GOP to Warren: That Dodd-Frank Rollback Was Just the Appetizer.”

Meanwhile, this article about how the OCC issued a press release highlighting trading profits by banks is disturbing…

XBRL: The SEC’s New Pilot Program for Structured Datasets

Last week, the SEC issued this press release that announced the launch of a pilot program to facilitate investor analysis and comparisons of public company financial statement data through “structured data sets.” In reading the press release, I really had no idea what this about – but this article from Accounting Today helped me (also see this piece). Here’s an excerpt from that article:

The SEC announcement in effect means that the thousands of XBRL submissions it receives as separate files each quarter will, for the first time, be available as a single database. The SEC requires U.S. public companies to structure the data in their quarterly and annual financial reports using XBRL, which is machine-readable. The structured data files are available in the SEC’s EDGAR database as exhibits to company filings. To facilitate the use of this information, the SEC’s Division of Economic and Risk Analysis will organize it into combined data sets on the SEC’s website in formats other than XBRL. The SEC said the data posted will be as reported by filers; no changes will be made to the information. Each data set posted will include all of the relevant filings submitted for the particular quarter or year.

– Broc Romanek