April 11, 2018

Buybacks & Rule 10b-18: Targeted by Legislation & Investors Exchange

Just days after Senator Tammy Baldwin introduced a bill to repeal Rule 10b-18, the Investors Exchange (known as the “IEX”) filed this rulemaking petition asking the SEC to “modernize” the rule. This all follows years of complaints about the rule (as reflected by this article).

IEX believes that the cost of buybacks is being artificially increased as a result of the current market structure which makes buyback orders seeking to comply with 10b-18’s safe harbor easily identifiable and a source of profits for short-term traders. IEX’s proposed solution is to amend the rule to add an exception that allows buybacks to be executed priced at the midpoint of the national best bid & offer. According to IEX, the exception would allow companies to execute buybacks under the protection of safe harbor at the best prevailing prices with minimal detection by front running short-term traders.

Rule 3-13 Relief from SEC’s Financials Requirements

Loving this EY memo about what the SEC considers when deciding to grant relief from Rule 3-13 of Regulation S-X. As we’ve blogged before, while the SEC Staff has long been able to modify – or – waive disclosure requirements in response to requests to modify what is required for the financials in a SEC filing, the Staff is now more amenable to grant Rule 3-13 requests than it was before. This is part of SEC Chair Clayton’s goal of removing unnecessary barriers to going public, etc.

Last Call for Early Bird Registration! Our “Pay Ratio & Proxy Disclosure Conference”

Time to act on the registration information for our popular conferences – “Pay Ratio & Proxy Disclosure Conference” & “Say-on-Pay Workshop: 15th Annual Executive Compensation Conference” – to be held September 25-26 in San Diego and via Live Nationwide Video Webcast. Here are the agendas – nearly 20 panels over two days.

Among the panels are:

1. The SEC All-Stars: A Frank Conversation
2. Parsing Pay Ratio Disclosures: Year 2
3. Section 162(m) & Tax Reform Changes
4. Pay Ratio: How to Handle PR & Employee Fallout
5. The Investors Speak
6. Navigating ISS & Glass Lewis
7. Proxy Disclosures: The In-House Perspective
8. Clawbacks: What to Do Now
9. Dealing with the Complexities of Perks
10. Disclosure for Shareholder Plan Approval
11. The SEC All-Stars: The Bleeding Edge
12. The Big Kahuna: Your Burning Questions Answered
13. Hot Topics: 50 Practical Nuggets in 60 Minutes

Early Bird Rates – Act by the End of This Friday, April 13th: Huge changes are afoot for executive compensation practices with pay ratio disclosures on the horizon. We are doing our part to help you address all these changes – and avoid costly pitfalls – by offering a special early bird discount rate to help you attend these critical conferences (both of the Conferences are bundled together with a single price). So register by April 13th to take advantage of the 20% discount.

Broc Romanek