June 28, 2016

SEC Proposes Changes to “Smaller Reporting Company” Definition

Yesterday, the SEC proposed changes to the “smaller reporting company” definition, which would increase the number of companies falling into that reporting category. Here’s the 83-page proposing release. The proposed rules would enable:

– Companies with less than $250 million of public float to provide scaled disclosures as a smaller reporting company, as compared to the current $75 million threshold
– If a company doesn’t have a public float, it would be permitted to provide scaled disclosures if its annual revenues are less than $100 million, as compared to the current “less than $50 million” threshold
– As under the current rules, once a company exceeds either of the thresholds, it won’t qualify as a smaller reporting company again until public float or revenues decrease below a lower threshold. Under the proposal, a company would qualify only if its public float is less than $200 million or, if it has no public float, its annual revenues are less than $80 million.
– The proposing release includes a great table showing the items of Regs S-K and S-X and the various accommodations made for scaled disclosure

The SEC isn’t proposing to increase the $75 million threshold in the “accelerated filer” definition. As a result, companies with a float of $75 million or more that would qualify as smaller reporting companies would be subject to the requirements that apply currently to accelerated filers – including the timing of the filing of periodic reports and the requirement that accelerated filers provide the auditor’s attestation of internal controls. As noted in this blog, so much for the harmonization recommended by the SEC’s Advisory Committee on Small and Emerging Companies last year.

SEC Adopts Resource Extraction Rules (Again)

The SEC was on a tear yesterday. In addition to proposing the “smaller company” changes, it adopted resource extraction rules. These are the rules that were originally adopted in 2012 – but were then struck down by the US District Court for DC in 2013. The rules were re-proposed in December after being sued by Oxfam America for not moving fast enough – and a court ordered that they be re-proposed. When the SEC re-proposed the rules, it promised to adopt the rules by June 27th – and it did on the nose!

Here’s the 268-page adopting release. And here’s an order from the SEC adopt the rules qualifying for some European Union & Canadian stuff…

I love it when the SEC conducts rulemaking without an open Commission meeting and confuses everyone. As noted in this blog, the SEC is entitled to take action in seriatim. I’ll be blogging about the circumstances that likely leads to rulemaking in seriatim in the near future…#headfake

Financial Choice Act: Discussion Draft

I recently blogged about how a House bill – the “Financial Choice Act” – would unwind much of Dodd-Frank & more. In this blog, Cydney Posner reports that the discussion draft for that bill is finally available…

Transcript: “Proxy Season Post-Mortem – The Latest Compensation Disclosures”

We have posted the transcript for our recent webcast: “Proxy Season Post-Mortem – The Latest Compensation Disclosures.”

Broc Romanek