November 28, 2018

Corp Fin Overhauls CDIs “Landing Page”

Hats off to Corp Fin for overhauling the “look” – meaning the layout & organization – of the landing page for its “Compliance & Disclosure Interpretations.” The new layout makes it more logical for newbies doing research.

But I have heard complaints that this new layout makes it difficult to determine what are the latest CDI changes. Here’s one of these complaints: “I get notified by text that they’ve issued new C&DIs, but the link just drops you in that landing page. I used to do a word search on the date, but that no longer works.”

Meanwhile, Corp Fin continues its project of overhauling the CDIs, doing so in waves (so far, the CDIs related to smaller-reporting companies, cross-border deals & the last of the telephone interps have been changed). Corp Fin is seeking input on the project – so if you see CDIs that you think need tweaking, let them know…

“Hidden” Right Wing Groups Called Out

We’ve blogged before about the “Main Street Investors Coalition” – a right-wing group with a big budget who entered our space this year. Some in the mass media have caught onto their strategy, like this LA Times article. This article also notes the activities of the American Council for Capital Formation (aka “ACCF) and the American Association of Senior Citizens, both of whom also are right-wing groups who issued “studies” ahead of the SEC’s recent “proxy process roundtable” about proxy advisors.

Not only is the mass media catching on, so are other folks. For example, see this article about Morningstar being upset about the “hidden” nature of these groups. And here is a note that I received from a member:

This strategy seems really dumb to me. Why do they put these astroturf organizations out front on this issue? Funny thing is, like a lot of people who work with public companies, I think proxy advisors could use some oversight, but this is so transparently manipulative & deceptive that it sours me on the whole effort.

Ain’t that the truth. And then you wind up with this type of article that ties large CEO pay packages to the whole effort and things really start to feel squishy. Companies need to remember: when you bash proxy advisors, you are also bashing their clients – your institutional investors – since they are the ones paying the proxy advisors. And many institutional investors are pretty vocal that they vote independently & thoughtfully. That’s literally the title of this note from Investment Company Institute. My hunch is that the SEC hasn’t been fooled by all this propaganda either…

Silicon Valley’s New “Stock Exchange” Stalled at the SEC

Here’s the intro from this WSJ article:

Silicon Valley’s plan to build a better stock exchange for the nation’s hottest startups hit a snag earlier this year when a member of the Securities and Exchange Commission opposed it, people familiar with the matter said. The Long-Term Stock Exchange—a proposed new market backed by venture capitalist Marc Andreessen, LinkedIn co-founder Reid Hoffman and other tech luminaries—was criticized by SEC Commissioner Robert Jackson Jr. He questioned whether the exchange’s model could entrench the power of founders and early investors in startup companies while hurting other shareholders, the people said.

The agency’s approval is needed to approve major changes to how exchanges work, and any member of the SEC can slow the process by calling for a full commission vote. Mr. Jackson’s move, which hasn’t been previously reported, overrode a decision by SEC staff to approve LTSE’s rules for listing companies, the people said.

The exchange that joined with LTSE to advance its listing rules, IEX Group, withdrew its proposal in August, after Mr. Jackson voiced his concerns but before the full commission could vote on it. LTSE had struck a partnership with IEX so it could launch its business more quickly and because it doesn’t yet have a license to run a stock exchange. An IEX spokesman said the firm withdrew the plan to give institutional investors more time to study LTSE’s tailored rules. “While we have decided to end our work together, IEX continues to support LTSE’s mission and focus on long-termism in the market,” spokesman Gerald Lam said.

Broc Romanek