The SEC announced that its Small Business Capital Formation Advisory Committee will meet next Thursday to address entrepreneurship hubs and recent trends in taking a company public. The SEC released this agenda for the meeting, which the public can watch live via webcast on the SEC’s website. In the announcement of the meeting, the SEC notes:
The Committee, which provides advice and recommendations to the Commission on rules, regulations, and policy matters relating to small businesses, will start the morning session by exploring best practices deployed across the country to foster start-up creation and growth. The Committee will hear from experts and discuss various factors that make entrepreneurial communities work effectively, and consider ways to continue supporting small business growth across the country.
In the afternoon session, the Committee will examine how economic conditions, recent changes in IPO activity, and other factors may impact companies going public. Experts in the field will share market data and insights with the Committee, and address how pathways to going public, including traditional IPOs, reverse mergers, SPACs, and direct listings, have been impacted.
I am glad that the Small Business Capital Formation Advisory Committee is delving into the topic of small business capital raising across the country. Take a look at these handy maps that the SEC provides highlighting where capital is being raised in the U.S. under different exemptions, and it is striking how concentrated capital raising tends to be in specific regions. As someone who has spent his entire life in the mid-Atlantic region of the U.S., I often try to consider how the perspectives on various issues that I speak and write about may differ in other areas of the country, and small business capital-raising is definitely an area where this consideration comes to mind. I think it is worthwhile for the SEC to highlight efforts to create entrepreneurship hubs across the country that can support startups in their efforts to raise capital and grow.
There is one phrase that frequently comes to mind when considering the regulatory environment that we have been living in for a while now: “life comes at you fast.” While we anxiously await the SEC’s next moves on its ambitious rulemaking agenda, it is easy to forget how active the SEC had been in the couple of years leading up to Biden administration. The Commission moved forward with some major changes to its rules regarding capital raising, perhaps most notably the exempt offering harmonization rulemaking that was adopted in November 2020.
If I had to pick one regulatory change from that no-so-distant era that still haunts me to this day, it is the ability for issuers to now broadly test the waters for an upcoming securities offering. Now, you might think that I would embrace such a modern approach to the regulation of capital-raising activities, but remember that I cut my teeth at the SEC where, at the time, we zealously defended the ramparts of Section 5 of the Securities Act, which specifies that any offer or sale of a security is registered with the SEC, exempt from registration or illegal.
My rampart-defending efforts took a pretty big blow with the JOBS Act in 2012, which amended my beloved Section 5 to permit testing the waters for emerging growth companies. Thereafter, the dominos began to fall, with the adoption of Securities Act Rule 163B in 2019, which enables all issuers to engage in testing-the-waters communications with qualified institutional buyers and institutional accredited investors regarding a contemplated registered securities offering prior to, or following, the filing of a registration statement related to such offering. In 2020, the Commission then rolled out an all-encompassing testing-the-waters provision for exempt offerings with the adoption of Securities Act Rule 241, which permits an issuer to use generic solicitation of interest materials to test the waters for an exempt offering of securities prior to determining which exemption it will use for the sale of the securities.
If I have piqued your interest in the testing-the-waters journey, I encourage you to check out the September-October 2021 issue of The Corporate Counsel, where I take you on a test drive of these still relatively new testing-the-waters provisions. Once you have had a chance to read the article, let me know if my grief over the demise of Section 5 as I knew it is misplaced. Please email sales@ccrcorp.com to subscribe to The Corporate Counsel newsletter if you do not not already have access to this important resource.
In the latest Deep Dive with Dave podcast, I am joined by Anna Pinedo, partner at Mayer Brown, for a discussion of current developments with exempt and hybrid securities offerings on the occasion of the publication of the Fourth Edition of Anna’s treatise, Exempt and Hybrid Securities Offerings. Topics include:
– The most significant regulatory developments in exempt and hybrid offerings
– How exempt and hybrid markets have evolved over the past few years
– Evaluating exempt offering alternatives in a post-JOBS Act world
– Current trends with the use of hybrid offering alternatives
– Utilizing the resources available with the treatise
Thanks for listening to the Deep Dive with Dave podcast!
Programming note: In observance of the federal holiday on Monday, we will not be publishing a blog. We will be back on Tuesday!
Over the course of this year, I have been taking a walk down memory lane and looking back on 15 years of contributing to CCRcorp publications and programs. To celebrate my 15th anniversary with the organization and to reminisce about the many accomplishments and developments throughout the years, CCRcorp Founder Jesse Brill recently joined me on the Deep Dive with Dave podcast. Topics include:
– The inspiration for founding The Corporate Counsel and The Corporate Executive
– A behind-the-scenes look at launching the newsletters
– How the publishing business branched out into so many other areas
– The main factors that set CCRCorp publications and websites apart from others
– The key areas that companies, executives and directors should be focused on now
– Jesse’s interests today: softball and early childhood education
Thanks for listening to the Deep Dive with Dave podcast! I am grateful for all of the ways in which I can communicate with our members, and Jesse is the reason we have all of these great resources available to us today.
I am honored that CCRcorp has commemorated my 15th Anniversary with the organization by launching my very own anniversary page on TheCorporateCounsel.net! In addition to my Deep Dive with Dave podcast with Jesse Brill, the anniversary page highlights my blogs from earlier this year recounting some of my favorite things about being a part of the CCRcorp publications and programs, a selection of videos (including one of my all-time favorites, “The Best of Dave & Marty”) and examples of my recent contributions to our newsletters. Thank you to everyone at CCRcorp for allowing me to be a part of the organization and for honoring me in this way.
By far the most touching feature on the anniversary page is a 32-minute Tribute video. I want to thank everyone who contributed to this Tribute – your messages meant so much to me and I greatly appreciate your friendship and support.
When I left the SEC back in May 2007 to join Executive Press (the predecessor of CCRcorp), I never imagined that I would be sitting here now, reflecting back on 15 years of writing, editing, podcasting and participating in our annual conferences. I have always thought of myself as an “SEC guy,” but I have actually spent more time doing this job than I spent at the SEC. The thing that has truly kept me going over the past 15 years – through the late nights and very early mornings – is my genuine desire to educate others and share my knowledge and love of the securities laws. I am constantly reminded that my work for CCRcorp allows me to be a part of a wonderful community of people who share a common interest in our chosen area of practice.
As for what is next for me, my focus is on our three important Conferences coming up next week. It is not too late to register for our Conferences! Sign up online (with the “Conference” drop-down, and the “PDEC” options), email sales@ccrcorp.com, or call 1-800-737-1271. You can bundle the Conferences together to get a discount rate.
Last month, the PCAOB issued a staff request for information and comment on matters related to the application and use of the PCAOB’s interim attestation standards. Input from the public will be used by the PCAOB staff to formulate recommendations for updates to the interim attestation standards.
As I mentioned in the blog back in August, one of the PCAOB’s top priorities is to modernize its standards. The interim attestation standards came from the AICPA and were adopted by the PCAOB in April 2003, and have remained substantially the same since that time. PCAOB attestation standards apply to attest engagements, which generally involve issuing a report on subject matter, or an assertion about subject matter, that is the responsibility of another party. Comments are due October 26, 2022.
Join us tomorrow at 2:00 pm eastern time for our webcast, “Cryptocurrency: Making Sense of the State of Play” here on TheCorporateCounsel.net. Hear from Ava Labs’ Lee Schneider, Liquid Advisors’ Annemarie Tierney, Cooley’s Nancy Wojtas and Coinbase’s Jolie Yang about current regulatory posturing and risks, structuring deals & products in the current regulatory environment, lessons from recent high-profile token collapses, and guidance on how to navigate uncertainties.
This webcast is free to members of TheCorporateCounsel.net and is available to non-members for $595. If you aren’t already a member, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.
The latest issue of The Corporate Counsel has been sent to the printer. It is also available now online to members of TheCorporateCounsel.net who subscribe to the electronic format – an option that many people are taking advantage of in our “new normal” of remote work. The issue includes articles on:
– When and How to Update Your Shelf Registration Statement
– Officer Exculpation: Q&As on Delaware’s Recent Amendment
Please email sales@ccrcorp.com to subscribe to this essential resource if you are not already receiving the important updates we provide in The Corporate Counsel newsletter.
On October 11, we kick things off with our first ever “1st Annual Practical ESG Conference.” This standalone conference will deliver usable, practical guidance on the hottest ESG topics, in a candid and conversational format. I will be joining an amazing group of ESG practitioners from legal, accounting/auditing and in-house corporate backgrounds to help you stay ahead of reputational risks, stakeholder demands and regulatory initiatives – and provide meaningful pointers to design, implement and improve corporate ESG programs.
On October 12-13, we take a deep dive into the upcoming proxy season with the “2022 Proxy Disclosure Conference.” With all of the forces shaping the 2023 proxy season, you do not want to miss this event. The talented group of panelists that we have assembled for this event will provide you with all of the guidance that you need to successfully navigate the upcoming proxy season.
On October 14, we turn our attention to critical executive compensation matters at the “19th Annual Executive Compensation Conference.” At this conference, you will hear from a wide range of panelists speaking on seven panels that will address all of the hot topics in executive compensation today.
It is not too late to register for our Conferences today! Sign up online (with the “Conference” drop-down, and the “PDEC” options), email sales@ccrcorp.com, or call 1-800-737-1271. You can still bundle the Conferences together to get a discount rate.
