December 10, 2015

Shareholder Engagement: CII Publishes Two Reports

Yesterday, the Council of Institutional Investors (CII) released two publications highlighting the most effective ways to conduct and disclose investor-company engagement:

– “Best Disclosure: Company-Shareholder Engagement

– “CII Investor-Company Roundtable: Effective Engagement to Sell Securities Using Bitcoin Blockchain Technology

Here’s an excerpt from this blog by Steve Quinlivan about’s new Form S-3 which proposes to sell securities using Bitcoin blockchain technology: The “About Digital Securities” section (but don’t forget the risk factors) in the S-3 illuminates how this translates into securities settlement:

“In connection with a digital securities transaction, the tØ software will publish the transaction to the proprietary ledger maintained by the Pro Securities ATS with respect to the relevant series of digital securities. Concurrently, the tØ software will electronically publish the proprietary ledger and commence the process of embedding in the Bitcoin blockchain information necessary to mathematically prove the validity of available copies of the proprietary ledger. Specifically, after a set of transactions in our digital securities have been executed and recorded to the proprietary ledger, the Pro Securities ATS will send a de minimis amount of Bitcoin from an ATS-controlled Bitcoin wallet to another ATS-controlled Bitcoin wallet using the blockchain protocol. This blockchain protocol provides for an editable field that can be used to implant code or other data within the Bitcoin transaction that will be embedded into the blockchain, and the tØ software will use this field to implant anonymized cryptographic hash functions for the digital securities transactions reflected on the proprietary ledger into the Bitcoin transfer made by the ATS. The blockchain will validate this de minimis Bitcoin transaction and embed it, together with the implanted anonymized cryptographic hash function, into the Bitcoin blockchain. As a result, once the Bitcoin transaction is immutably embedded into the Bitcoin blockchain, an immutable record of the digital securities transactions reflected on the proprietary ledger is also recorded within the Bitcoin blockchain. The Bitcoin blockchain participants involved in validating the de minimis Bitcoin transaction do not have any access to the underlying digital securities transaction data. The transaction costs associated with this process relate to the de minimis costs of the Bitcoin currency transaction conducted by the Pro Securities ATS. As a result, the Pro Securities ATS—rather than us or holders of our digital securities—will bear such minimal costs required in connection with embedding cryptographic hash functions into the Bitcoin blockchain.”

You can find more background on this in the Bitcoin Magazine.

The SEC’s Accountants Speak!

A total of 12 sets of remarks were posted yesterday on the SEC’s “Speeches” page – the speeches were delivered as part of the annual AICPA conference. 11 of them from members of the Office of Chief Accountant – and this speech by Chair White entitled “Maintaining High-Quality, Reliable Financial Reporting: A Shared and Weighty Responsibility.” Here’s a summary of these remarks from Cooley’s Cydney Posner…

Transcript: “P4P: What Now After the SEC’s Proposal”

A long while back, we posted the transcript for the popular webcast: “P4P: What Now After the SEC’s Proposal.” We have also posted over 50 memos on the SEC’s proposal…

Broc Romanek