Yesterday, as noted in this NY Times article, the House Financial Services Committee passed the “Investor Protection Act” by a vote of 41 to 28. The bill includes an additional $1 billion-plus for the SEC’s budget and the proxy access provision blogged about recently. The Act now moves to the full House to be considered in the coming weeks, with a vote predicted to be held in early December.
The Adler-Garrett amendment – which exempts companies with a market cap of less than $75 million from having to comply with SOX’s internal controls provisions – passed by a vote of 37 to 32. This amendment was supported by White House Chief of Staff Rahm Emanuel – but as the NY Times reports: “The amendment was criticized by senior Democrats, including Representative Barney Frank of Massachusetts, the chairman of the committee. But at a news conference on Tuesday, Mr. Frank defended Mr. Emanuel’s involvement, saying he had helped to negotiate a substantial narrowing of the provision.”
I didn’t watch the Committee in action, but apparently it was a fluid, fast-moving and confusing situation and I have read a number of conflicting reports on what actually was passed. I’ll post the bill as passed when I get my hands on a copy so you can see how it differs from this discussion draft (here is the Committee’s summary of what passed yesterday).
As I understand it, this Miller amendment was passed, which would impact the independence of the FASB by establishing a federal government forum that would overlooking the FASB’s work. I also hear that this amendment from Congressman Perlmutter will also be offered as an amendment to the upcoming legislation, which would create a new risk regulator structure. I blogged about these actions yesterday as well.
Course Materials Now Available: “4th Annual Proxy Disclosure” and “6th Annual Executive Compensation”
Remember you will need your Conference ID and password to access these. Here is other important Conference information that I blogged about earlier this week.
When Will the SEC Adopt New “Proxy Statement Disclosure Enhancement” Rules?
Yesterday, SEC Chair Mary Schapiro delivered a speech at PLI’s annual Securities Law Institute that summarized the current state of proposals that are Corp-Fin related, including identifying the areas that the SEC’s upcoming concept release on proxy plumbing will address. She indicated that the proxy access proposal would be considered by the Commission in early 2010 (which is not new news, as noted in this blog).
But she did not indicate when the proxy disclosure enhancements proposals would be adopted (a set of proposals that includes the proposed executive compensation rules). At this point, it’s clear that these rules will not be adopted on November 9th – as widely rumored for some time – and it’s unknown when they will be adopted or if they would still apply to the upcoming proxy season even though time is running short to modify D&O questionnaires to capture new information. Corp Fin Director Meredith Cross indicated on a panel that these rules might indeed apply to the 2010 proxy season, but as I understand it, her statement wasn’t definitive so anything can happen. [Don’t forget our upcoming webcast: “Ask the Experts: Prepping for a Wild Proxy Season.”]
And even harder for many companies: timing compensation committee meetings (and other board meetings) to deal with any new rules before the year is out. Numerous members have been emailing me asking if – and when – this is gonna happen…
Survey: Will Your Compensation Committee Hold a Special Meeting if the SEC Adopts New Rules?
Here is an anonymous survey to gather information about what companies are doing to prepare for the possibility of new SEC rules that apply to the upcoming proxy season:
Continuing our proxy solicitor podcast series, in this podcast, Rick Grubaugh of D.F. King & Co. provides some insight into issues related to shareholder proposals seeking to allow shareholders the right to call a special meeting – many companies have received passing votes and are faced with tough choices on how to deal with the demand – including:
– What is background of the proposals that seek companies to allow shareholders to call a special meeting?
– What might we expect for the 2010 proxy season regarding this type of proposal?
– What do institutional shareholders believe is the right threshold of share ownership to call a special meeting?
– What options do companies have if they receive a proposal?
Congress Update: The Battle Over SOX’s Internal Control Requirements Intensifies
This morning, the House Financial Services Committee will be voting on Rep. Frank’s “Investor Protection Act of 2009.” According to this WSJ article, the Committee passed an amendment by voice vote yesterday to exempt smaller companies from Section 404 of Sarbanes-Oxley. Rep. Frank reportedly hopes to beat that back today.
This Huffington Post blog notes that the White House is not doing anything to stop the move to soften Section 404 – and in fact, may be supporting it. This Washington Post article notes the same thing.
Meanwhile, FEI’s “Financial Reporting Blog” notes the latest developments regarding Congressional interest in overhauling the accounting area as there are two competing bills being floated. One would overhaul the FASB by creating a Financial Reporting Forum to oversee its activities.
The other would create a new Federal Accounting Oversight Board to do the same – this new Board would also displace the SEC as the ultimate authority and overseer of accounting standards for public companies (a role that the SEC now delegates to the FASB with its oversight). As reported by the Journal of Accountancy, a joint letter from a group normally at odds with each other argues that the SEC should retain its role.
More on “The Mentor Blog”
We continue to post new items daily on our new blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Avoiding Market Misperception of Tax Withholding Transactions
– Survey Results: Use of Enterprise Risk Management (and Disclosure Thereof)
– Analysis: Recent Corp Fin Accounting Comments
– Fifteen Risk Factors for Poor Governance
– How Colleges (and Law Schools) Are Changing
– Test Your Access Now: To ensure you don’t have any technical snafus for the Conferences, please test your access today (this test is only available this week) by using the ID and password that you received for the Conferences.
When you test your access, you can test our CLE Tracker as well as input your bar numbers, etc. You also will be able to input your bar numbers anytime during the days of the Conferences too (remember that you will need to click on the periodic “prompts” all throughout each Conference to earn credit). If you are experiencing problems, follow these webcast troubleshooting tips.
– How to Access the Conference: To access the webcast, use the ID/password that you received in an email from us to get in via a prominent Conference link that will be on the home page of TheCorporateCounsel.net on the day of the Conference; this ID/password is separate and different from any you use for our sites. Note that times posted are in Pacific Time; archives will be available within 24 hours after the live event ends.
– How to Earn CLE Online: Read the “FAQs about Earning CLE” carefully to see if it is possible for you to earn CLE for watching online – and if so, how to accomplish that. Both Conferences will be available for CLE credit in most states (but hours for each state vary; see which state and hours in List: CLE Credits).
– Don’t Share Your ID/Password: We remind you that sharing your ID and password with anyone is stealing from us and a crime.
For those attending in San Francisco:
– Check-In Times: When you come to the San Francisco Hilton – located at 333 O’Farrell Street – you can check in for the Conferences (i.e. pick up your Conference materials, etc.) starting at 7:30 am on Monday, November 9th until the last panel on Tuesday. Continental breakfast is available on Monday from 7:30 to 8:30 am – and on Tuesday from 7:00 to 8:00 am.
– Monday Night Reception: We hope you can join us after the Conference on Monday for our Opening Reception – to be held after the last panel ends – from 6:00 to 8:00 pm. The opening reception will be held in the Exhibit Hall.
You Can Still Attend Via Video Webcast: Due to unprecedented demand and limited space at our conference hotel for the Conferences, we were forced to end Conference Registrations for those attending live in San Francisco. It’s sold out! But note in the alternative, you can still attend by video webcast. You automatically get to attend both Conferences for the price of one: Register now.
As I’ve been covering in this blog over the past week, Congress is moving ahead with its regulatory reform efforts for the markets. Below is a summary of this Sullivan & Cromwell memo:
On October 27, U.S. House Financial Services Committee Chairman Barney Frank released a discussion draft of the Financial Stability Improvement Act of 2009, a legislative proposal for reform of the regulation of the financial services industry. The proposed legislation would, among other things, create a framework for regulation of systemically important financial firms and activities; provide an alternative resolution regime for systemically important financial firms; merge the Office of Thrift Supervision into the Office of the Comptroller of the Currency, retaining the federal thrift charter; reform in several significant respects the regulation of insured depository institutions and their holding companies; and impose certain asset retention requirements on originators and securitizers of asset-backed securities.
More on our “Proxy Season Blog”
With the proxy season now looming in many of our minds, we are posting new items regularly again on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Europe: Shareholders Increasingly Exercise Votes
– Postseason Review: Withhold Votes
– Analysis: Online Annual Reports
– Reminder: “Independence” Ain’t What it Used to Be!
– Will the Sky Fall if Union Representatives Sit on Boards?
– Time Warner Explains Consultant Selection
Below is an excerpt from this Davis Polkmemo that describes key provisions of two competing over-the-counter derivative bills being considered in the House, comparing their similarities and differences:
Two competing bills to reform the over-the-counter derivatives markets are awaiting action by the House of Representatives: a bill to enact the “Over-the-Counter Derivatives Markets Act of 2009” reported by the Financial Services Committee, chaired by Barney Frank, and a bill to enact the “Derivatives Markets Transparency and Accountability Act of 2009” reported by the Agriculture Committee, chaired by Collin Peterson.
Each of the Frank Bill and the Peterson Bill is based on the proposal released by the Obama Administration on August 11, 2009, and since their earlier releases as discussion drafts, they have moved incrementally closer to each other. The bills share many common features, but several important differences remain to be reconciled. It is expected that Chairman Frank and Chairman Peterson will work to reconcile the differences before a bill moves to the House floor.
And here is an interesting article from Harpers entitled “An Object Lesson in Governmental Failure: Derivatives Reform.”
RiskMetrics Opens Its Policy Comment Period
Last week, RiskMetrics opened its policy comment period, providing an opportunity for a range of industry constituents to provide feedback on updates to its proxy voting policies in markets worldwide. Topics covered include takeover defenses in the U.S.; board and director independence in Japan, the U.S., and Europe; compensation and slate ballots in Canada; and equity and share purchase authorities in Europe. The comment period runs through next Wednesday, November 11th.
Sidenote: On Friday, the SEC’s Inspector General released 536 exhibits related to the SEC’s failure to uncover the Bernie Madoff scandal. That’s a lot of paper. Here’s DealBook’s analysis of what the exhibits say…
Also notable is this recent speech from SEC Commissioner Luis Aguilar entitled “The Power of the Shareholder & the Rise of Corporate Democracy.”
Our November Eminders is Posted!
We have posted the November issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!
On Wednesday, as noted in this MarketWatch article (and this blog too), Rep. Maxine Waters introduced an amendment that was passed by the House Financial Services Committee that would require companies to allow proxy access. The amendment is part of a larger financial reform bill that’s expected to get considered by the full House soon. Of course, the proxy access component of the bill could all die at any time – but it’s notable since its gotten much further than either the Schumer or Peters bill has ever moved.
For those in denial and think that the SEC’s delay of acting on its outstanding proposals killed the move to adopt proxy access, this may serve as a “wake-up” call that access is very much still alive and on the table…
A few days ago, I blogged about a move in the House to exempt smaller companies from SOX’s internal controls requirements. As noted in this Huffington Post blog, one of that amendment’s co-sponsors, Rep. Carolyn Maloney, has backed down and now merely proposes yet another study regarding the impact of Section 404 be done. As noted in the blog, Maloney acknowledges she was not aware of the recent study conducted by the SEC – but she wants the study done anyways. Congress at work…
Schering-Plough Issues Results of Shareholder Survey on Compensation
As Susan Wolf mentioned would happen during her podcast regarding Schering-Plough’s experiment of surveying its shareholders about its pay practices ahead of its annual meeting last year, the company issued a report yesterday regarding the survey responses it received. We have posted a copy of this report in our “Say-on-Pay” Practice Area on CompensationStandards.com.
Note that Pfizer is the second company to go “biennial” by announcing yesterday it will start putting say-on-pay on its ballot next year.
IASB’s Possible Changes to Fair Value Accounting
Last week, IASB’s Chair – Sir David Tweedie – delivered a speech providing an update how fair value accounting might be reformed through changes to IAS 39, “Financial Instruments.” Also read FEI’s “Financial Reporting” Blog to learn how FASB and IASB have committed to “re-tripling” their efforts to meet the 2011 convergence deadline.
From our proxy solicitor podcast series, in this podcast, Reid Pearson of The Altman Group provides some insight into option exchange program issues, including:
– Once a company has decided to bring an option exchange program to shareholders, what are some of the first steps they should consider?
– From a proxy voting perspective, what types of issues will institutional investors and the proxy advisory firms (egs. RiskMetrics, Glass Lewis) be looking at when deciding on their vote or recommendation?
– Is it acceptable for an exchange program to recycle the exchanged shares back into the pool of shares available for future grant?
– What kind of fallout would there be if a company does an exchange of underwater stock options, but does not bring the program to shareholders?
In this USA Today article, SEC Commissioner Elisse Walter’s recent battle with cancer is described nicely.
Survey Results: “Affiliates” for Rule 144 Purposes
We recently wrapped up our Quick Survey on “”Affiliates” for Rule 144 Purposes.” Below are our results:
1. At our company, we define the term “affiliates” for Rule 144 purposes as:
– All Section 16 “persons” – 62.3%
– All Section 16 “officers” – 12.3%
– Selected Section 16 officers and directors – 18.6%
– Selected Section 16 officers – 0.5%
– CEO only – 0.5%
– Other – 5.9%
Please take a moment to respond anonymously to respond to our “Quick Survey on D&O Questionnaires and Related-Party Transactions.”
The “4th Annual Proxy Disclosure Conference”
Due to unprecedented demand and limited space at our conference hotel for the “4th Annual Proxy Disclosure Conference,” we were forced to end Conference Registrations for those attending live in San Francisco. It’s sold out!
You Can Still Attend Via Video Webcast: But note in the alternative, you can still attend the “4th Annual Proxy Disclosure Conference” (11/9) – which is paired with the “6th Annual Executive Compensation Conference” (held on 11/10) – by video webcast. You automatically get to attend both Conferences for the price of one. Here is the agenda for both Conferences. The speakers are a “who’s who” in the executive compensation field, including:
– SEC’s Shelley Parratt
– Disclosure experts Dave Lynn, Mark Borges, Alan Dye and Ron Mueller
– Disclosure experts Keith Higgins, Scott Spector, Howard Dicker, Amy Goodman and Martha Steinman
– Treasury’s Mark Iwry, Senior Advisor to Secretary Geithner
– RiskMetrics’ Pat McGurn and Valerie Ho
– Glass Lewis’ Bob McCormick
– NY Times’ columnist Joe Nocera
– Noted counsel John Olson and Marc Trevino
– Renowned consultants Fred Cook, Ira Kay, Mike Kesner, Doug Friske, James Kim and Don Delves
– Chevron director Bob Denham and P&G Chair A.G. Lafley
– Investor advocates Meredith Miller and Paul Hodgson
– Our own Jesse Brill and Broc Romanek
Order Audio from NASPP Conference: In addition, you can still hear each – and any – of the 36 panels you wish from the NASPP Conference by ordering the downloadable audio and course materials.
Yesterday, Corp Fin issued Staff Legal Bulletin No. 14E, which changes how the Rule 14a-8(i)(7) exclusion for ordinary business operations applies so that proposals relating to CEO succession planning generally are no longer excludable (“generally” because proposals that seek to micro-manage will still be excludable; we’ll have to see how “micro-manage” is interpreted by the Staff) – and that risk-related proposals will be analyzed under a new framework.
The SLB lays out this risk-related framework as: “rather than focusing on whether a proposal and supporting statement relate to the company engaging in an evaluation of risk, we will instead focus on the subject matter to which the risk pertains or that gives rise to the risk.” The SLB also reminds companies and proponents how to notify the Staff when they intend to submit correspondence in connection with a no-action request.
Unlike last year’s Staff Legal Bulletin regarding 14a-8, this one is bound to cause a stir because it essentially reverses two prior Staff decisions – with the likely result of more proposals being included in proxies during the upcoming proxy season.
In his blog, Sanford Lewis describes the changed positions as a victory for shareholders and gives some background about the press for these changes, including the shareholder proposal meeting with the Corp Fin Staff held last month. And the RiskMetrics’ “Risk & Governance” Blog includes quotes from a number of activists hailing the SEC’s actions, it also describes how these two Staff positions have evolved over time.
Posted: 2010 Compensation Disclosure Treatise
Dave Lynn, Mark Borges & I just finished the new ’10 version of Lynn, Borges & Romanek’s “Executive Compensation Disclosure Treatise and Reporting Guide” – it is now posted on CompensationDisclosure.com and the hard copy is at the printers (delivery expected in mid-November). To obtain both the online and hard copy versions of this Treatise, you need to try a no-risk trial to the Lynn, Borges & Romanek’s “Executive Compensation Service” now.
Without access to this New Treatise – as well as the “Proxy Disclosure Updates” quarterly newsletters that you will get if you renew as a Service subscriber – you will miss our critical guidance that you need to prepare your proxy disclosures during this upcoming proxy season including this:
Proxy Disclosure Updates – Full Walkaway Model CD&A: Dave is putting the final touches on a key, new model CD&A disclosure which will need to be addressed in this year’s proxy statements. The upcoming Fall issue of “Proxy Disclosure Updates” will focus on this important new full walkaway disclosure, providing not only new model disclosure, but also invaluable guidance on what to cover and why and how. To receive this model disclosure as soon as it’s out, you need to try a no-risk trial now.
Carving Up the “Investor Protection Act”: The Political Process at Work on SOX’s Internal Controls
Last week, I polled members as to whether they thought the SEC’s 6th – and deemed “final” – delay in having smaller companies provide auditor attestations would really stick. The poll results were:
– 50% said SEC would not further delay the deadline
– 22% said the SEC would further delay it without being forced to
– 12% said Congress would force the SEC to delay it
– 16% said “what me worry?”
Looks like there is a chance that 12% knew what they were talking about. Yesterday, the Huffington Post reported in this blog that Reps. John Adler (D-NJ) and Carolyn Maloney (D-NY) planned to introduce amendments to the Investor Protection Act that would permanently exempt companies with market capitalizations of less than $75 million from Section 404 of Sarbanes-Oxley and further delay that Section’s application to companies with a market cap of less than $700 million. Here is Rep. Adler’s related press release.
I have a copy of Rep. Adler’s “Dear Colleague” letter as well as an opposition letter from the Consumer Federation of America, which combined provide more details than the Huffington Post blog – if you want them, email me…
Yesterday, HealthSouth announced that its board plans to adopt a by-law amendment relating to shareholder nominations for directors that would reimburse activist shareholders, subject to certain conditions, where the candidate gets at least 40% of the votes cast. Here is Joann Lublin’s WSJ article.
The proxy access alternative of reimbursement bylaws – first permitted under Delaware law back on August 1st – has been promoted by AFSCME, who submitted two shareholder proposals on this topic this past proxy season and plans to submit it to ten companies next year. It also has been highlighted as a reasonable solution during the proxy access debate by Professor Charles Elson, who just happens to be Chair of HealthSouth’s Governance Committee. So Charles is putting his money where his mouth is…
Mailed: September-October Issue of The Corporate Executive
The September-October 2009 issue of The Corporate Executive contains a great lead article about how to plan ahead for your executives ahead of the inevitable tax increases (thanks to Mike Melbinger of Winston & Strawn for drafting this piece!). The issue includes:
– Secular Trusts, Distributions and Other Compensation Planning Opportunities in Anticipation of Potential Tax Increases
-Deferral vs. Acceleration of Income
– Common Acceleration Strategies
– Termination of Non-Qualified Deferred Compensation Plans
– Current Employer Funding Using a Secular Trust
-Roth IRA Conversions and Rollovers in 2010
– 3121(v) Employment Tax Election for SERPs
– Preparing Now For IFRS 2
-Option Pricing Model
– Awards with Graded Vesting
– More Granular Option Valuations
– Accounting for Payroll Taxes
– Share Withholding
Act Now: Get this issue on a complimentary basis when you try a “Rest of ’09” for free when you try a 2010 no-risk trial today.
A few weeks back, I blogged about New York’s new Power of Attorney law and its possible implications for registration statements, Section 16 reports and Form 10-Ks. Since then, there has been disagreement among practitioners regarding how broadly the new law should be applied in the federal securities law context.
A number of working groups, including one from the New York State Bar, have been making efforts to introduce a technical amendments bill in New York would clarify some of the open issues – but it sounds like there are some issues that would remain outstanding even after those efforts. Plus, a technical amendment doesn’t appear on the fast-track and it’s not likely to be adopted soon.
In this podcast, Maureen Sladek of IBM provides some great insight by identifying the open issues and addressing how to handle them under New York’s new Power of Attorney law (including providing a set of FAQs and sample POA under the new law that she co-wrote with Evan Barth; see our “Power of Attorney” Practice Area for those), including:
– What’s the background on the New York Power of Attorney law?
– What are the biggest problems from a corporate perspective?
– Are there any efforts to fix these problems?
– What should companies do in the meantime?
Ask the Experts: Prepping for a Wild Proxy Season
In a few weeks, we’re holding a webcast entitled “Ask the Experts: Prepping for a Wild Proxy Season,” during which a panel of experts will provide practical guidance in a variety of areas that those grappling with the upcoming season know too well. This is your chance to get your questions answered by the best – shoot me an email with any proxy season questions you may have leading up to November 18th. Your identity will be kept anonymous.
More on “The Mentor Blog”
We continue to post new items daily on our new blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Is the SEC Necessary?
– Towers Perrin Releases 2008 D&O Survey Report: Some Comments
– More on “Law Firms Going Public: Crazy Talk?”
– Survey Responses: Transfer Agent Opinion Requests
– Study of Early Adopters: IRO Use of Twitter
Last week, Tom Ball gave us the basics in broker nonvote math. In this podcast, David Drake and Rhonda Brauer dig further into the math of revised NYSE Rule 452 – here’s the worksheet you should print out to follow along – and help you explore some possible ways to get out those otherwise lost retail votes.
In our “Proxy Season Blog” yesterday, I blogged about the confusion of the intersection of revised Rule 452 and Delaware law. Note how there has been a bit of back and forth in Topic #5216 of our “Q&A Forum” about this topic too.
And remember that a number of critical proxy season areas are covered in our “Special” November-December issue of the Deal Lawyers print newsletter. Finally, note that the upcoming issue of The Corporate Counsel will be providing practical guidance in the broker nonvote area.
Federal Reserve Proposes Guidance on Sound Incentive Compensation Policies
From Cleary Gottlieb: Yesterday, the Federal Reserve released for comment proposed guidance on incentive compensation applicable to all banking organizations under its supervision. The proposal includes two supervisory initiatives. The first, applicable to 28 “large, complex banking organizations,” will involve a review each organization’s policies and practices to determine their consistency with the guidance described below. The organization-specific policies will be assessed by supervisors in a special coordinated “horizontal review.”
The press release issued with the proposed guidance states that “[t]he policies and implementing practices adopted by these firms in response to the final supervisory principles will become a part of the supervisory expectations for each firm and will be monitored for compliance.” The second initiative will involve a review of compensation practices at regional, community, and other banking organizations not classified as large and complex, as part of the regular, risk-focused examination process. These reviews will be tailored to take account of the size, complexity, and other characteristics of the banking organization.
The guidance is designed to apply to the compensation of: (1) senior executives and others responsible for oversight of an organization’s firm-wide activities or material business lines; (2) individual employees, including non-executive employees, whose activities may expose the organization to material amounts of risk; and (3) groups of employees who are subject to the same or similar incentive compensation arrangements and who, in the aggregate, may expose the organization to material amounts of risk.
Alongside the proposed guidance, the Fed released six Q&As. The Q&As state that the Fed has issued the proposed guidance under its authority to monitor the “safety and soundness” of institutions subject to its oversight. The Q&As also note that the proposed guidance is “consistent with” the Financial Stability Board’s Implementation Standards for its Principles for Sound Compensation Practices, which were released last month in conjunction with the G-20 Summit in Pittsburgh.
The FSB was organized at the direction of the G-20 in order to address vulnerabilities and develop and implement strong regulatory policies in the interest of financial stability. The United States is the first G-20 nation to issue detailed guidance on compensation practices since the FSB’s Implementation Standards were released. The Q&As provide that comments on the proposed guidance will be accepted for 30 days.
In his “Proxy Disclosure Blog last night,” Mark Borges blogged his analysis of the plan from Special Master Feinberg that was posted late yesterday. He also analyzes the separate “determination” letter sent to Banc of America.
SEC Proposes Rules for Dark Pools
On Wednesday, the SEC proposed a set of rules related to dark pools (here is Chair Schapiro’s statement), meant to address three areas of concern by:
– Requiring actionable Indications of Interest (IOIs) — which are similar to a typical buy or sell quote — to be treated like other quotes and subject to the same disclosure rules.
– Lowering the trading volume threshold applicable to alternative trading systems (ATS) for displaying best-priced orders. Currently, if an ATS displays orders to more than one person, it must display its best-priced orders to the public when its trading volume for a stock is 5% or more; the SEC’s proposal would lower that percentage to 0.25% for ATSs, including dark pools that use actionable IOIs.
– Creating the same level of post-trade transparency for dark pools – and other ATSs – as for registered exchanges. Specifically, the SEC’s proposal would amend existing rules to require real-time disclosure of the identity of the dark pool that executed the trade.
