On July 16, 2026, the U.S. Securities and Exchange Commission (the “SEC”) proposed new Regulation E-Delivery (“Reg E-Delivery”), a potential modernization of the default manner in which issuers, broker-dealers, investment advisers, and other market participants provide information to investors in our increasingly electronic world. In the words of SEC Chairman Paul Atkins, “[t]oday, the Commission took an important step toward allowing the financial services industry to harness technology for the benefit of everyday American investors. By proposing to permit electronic delivery to become the default method for issuers, market intermediaries, and others to communicate with investors, we are taking another stride toward a regulatory framework suitable for the modern era, a key pillar of my agenda. In an age of artificial intelligence and blockchain technology, a default to paper delivery should be a relic, not a standard.”

Today, many regulatory disclosures pursuant to the federal securities laws are still delivered in paper, unless the recipient affirmatively opts otherwise based on the “notice, access and delivery” framework that the SEC adopted over 30 years ago and the regulated entity and, as applicable, its service providers, have the operational and practical means to effect e-delivery (particularly where there are substantial numbers of recipients). However, the benefits of electronic information delivery are numerous—e-delivery is rapid, cost-efficient, secure and provides for information to be widely delivered with ease. Investors and others can access and parse information on their phones or laptops worldwide; in fact, a 2025 survey by the SEC’s Office of the Investor Advocate “found that the vast majority of U.S investors (nearly 80%) prefer some form of e-delivery for financial disclosure documents that do not include personal information, and also that a majority (approximately 63%) prefers some form of e-delivery even for documents that do include personal information.” Artificial intelligence and blockchain technologies only serve to enhance the benefits provided by e-delivery. In light of these technological steps forward, the SEC is proposing Reg E-Delivery as a comprehensive update to its current information delivery framework.

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On July 23, 2026, the Securities and Exchange Commission (“SEC”) announced that it will host a roundtable on September 17, 2026, to discuss paths toward 24-hour trading in U.S. equity markets. The roundtable will address preparations needed to support overnight trading, operational and resiliency considerations in a round-the-clock market, and the opportunities and challenges associated with expanding trading hours.

The roundtable reflects the SEC’s continued focus under Chairman Paul Atkins on modernizing the structure of U.S. equity markets and evaluating whether existing rules and market infrastructure can accommodate expanded trading availability. Market participants are expected to actively engage in the discussion given the operational, risk-management, and technology implications of moving toward continuous trading. Some U.S. retail brokerages currently offer trading of certain equity securities nearly 24 hours a day, 6 days a week via alternative trading systems (ATSs), and other major industry players, including the New York Stock Exchange and Nasdaq, have announced plans to enable near-24-hour trading, 5 days a week, subject to regulatory approval.

The event will be open to the public and held at the SEC’s headquarters in Washington, D.C., with a live stream available on SEC.gov and a recording to be posted afterward. The event announcement is linked here.

Webinar | August 6, 2026
1:00 a.m. – 2:00 p.m. EDT
Register here.

The institutional private placement market has experienced continued and rapid growth in recent years, with new market participants playing a more significant role. In this session, we will discuss how investment grade debt private placements differ from bank debt as well as from public debt. In addition, we will discuss various related debt instruments. We will address the following:

  • Section 4(a)(2) institutional private placements and market developments
  • Typical marketing documents and investors; model forms and settlement issues
  • Covenants and other terms
  • Comparison to bank loans, Rule 144A offerings, and public debt offerings
  • Global depositary notes and role of depositary bank
  • Settlement issues and other recent developments

On July 9, 2026, the Financial Industry Regulatory Authority, Inc. (“FINRA”) published Regulatory Notice 26-14, requesting comment on a proposal to modernize certain requirements applicable to retail communications under FINRA Rule 2210 (Communications with the Public) (the “Proposal”).  The Proposal represents one of the most significant modernization efforts relating to the review and supervision of broker-dealer communications in over a decade, undertaken as part of FINRA’s broader “FINRA Forward” initiative.  The Proposal addresses three key areas:

(1) Modernizing supervision and review of retail communications by replacing the current prescriptive principal pre-use approval requirement with risk-based standards for supervising retail communications; 
(2) Modifying and streamlining retail communication filing requirements; and 
(3) Modifying and streamlining the broker-dealer standard for communications containing recommendations.

Continue reading this Legal Update.

On June 18, 2026, the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) issued a joint request for public comment regarding potential updates to the definitions of “swap” and “security-based swap,” along with other interpretive issues arising under Title VII of the Dodd-Frank Act.  The agencies seek feedback on whether existing definitions finalized in 2012 (referred to as the product definitions) and jurisdictional boundaries still appropriately reflect modern market structures, emerging financial products, and evolving trading practices.   The initiative is intended to provide greater regulatory certainty while reducing ambiguity in areas in which SEC and CFTC oversight overlaps.

While this request for comment (RFC) comes largely on the heels of discussions relating to event contracts, it is quite broad.  In relation to event contracts, the SEC and CFTC ask for comment as to whether additional clarity is required when an event “directly affects” the financial statements, financial condition or financial obligations of an issuer and is therefore a security-based swap that is subject to the SEC’s jurisdiction.  The agencies also ask whether there are instances in which an event contract referencing one or more securities should be considered a “put, call, straddle, option, or privilege” on securities instead of a swap or security-based swap.

The RFC asks a number of questions concerning other products that have been the subject of recent commentary and controversy, including cash-settled perpetual contracts, including perpetual futures.  For example, the release seeks comments as to whether a cash-settled perpetual contract referencing an equity security could be treated as a security future rather than a security-based swap.

Finally, and of interest to readers of this blog, the RFC asks whether clarity is needed to distinguish traditional debt securities that have always been excluded from the definition of swap and security-based swap, such as notes or bonds or debentures, the performance of which is based on a reference asset, so structured products.  The RFC asks for input on how to treat innovative or structured products that may blur the lines between swaps and security-based swaps, including whether factors such as issuance under a Trust Indenture Act‑qualified indenture or the existence of a lender‑borrower relationship should be dispositive of their characterization as debt securities.  This is concerning.

Read the official press release here.  Comments are due on or before August 24, 2026.

On July 8, 2026, the Securities and Exchange Commission (the “SEC”) announced that its Small Business Capital Formation Advisory Committee (the “SBCFA”) will hold a public meeting on July 21, 2026 to explore ways to modernize public market access and encourage IPOs and small public company capital formation.

As discussed in our prior post from April 2026, the SBCFA Committee held a meeting on April 28, 2026 focused on encouraging more companies to go and stay public.  Building on ideas generated during that meeting, members will continue exploring ways to encourage more companies to go and stay public.  At the April meeting, the Committee heard from members on the state of the IPO market, considering the existing regulatory framework and how IPO activity and market shifts are impacting decisions by companies, particularly small-cap companies, to go public.  SEC Chair Paul Atkins has championed a “Make IPOs Great Again” initiative, pledging to reduce regulatory friction and simplify listing requirements to reverse the long-term decline in the number of U.S. public companies.  Central to that effort is a focus on smaller companies, with the Chair arguing that disclosure requirements should be calibrated to a company’s size and maturity.

The upcoming meeting will advance those themes further.  The Committee will consider ways to modernize the IPO process and potential regulatory reforms, including certain recently proposed SEC rulemakings – which have been discussed in our May 2026 posts regarding reforms to the registered offering framework, enhancements to filer accommodations and simplified filer status for reporting companies, and optional semiannual reporting framework for public companies – aimed at reducing regulatory friction and facilitating capital formation. To facilitate discussion and deepen the Committee’s understanding of the regulatory landscape, members will hear from SEC staff in the Division of Corporation Finance and other market participants.

This discussion comes at a particularly significant moment, as the SEC’s 2026 Regulatory Agenda, recently released under Chair Atkins, noted that “[e]very IPO is an invitation to workers and savers to participate in the prosperity of the next generation of American enterprise” and that “[w]hen fewer companies go public, fewer investors receive that invitation.”  The SBCFA Committee meeting is open to the public and streamed live on SEC.gov. See the full agenda for the meeting, and visit the committee webpage.

The U.S. Court of Appeals for the Second Circuit recently provided guidance regarding Section 16(b) short-swing profit liability for corporate issuers and institutional investors.  On July 7, 2026, the court affirmed the dismissal of an action brought by the post-bankruptcy successor to Bed Bath & Beyond (“BBB”), which sought to recover more than $310 million in alleged short-swing profits from an institutional investor.

The Second Circuit held that contractual beneficial ownership blockers were effective and enforceable.  Those blockers limited the investor’s ability to convert securities or exercise warrants to the extent doing so would cause it to exceed a 9.99% beneficial ownership threshold. As a result, the investor never became a greater-than-10% beneficial owner for purposes of Section 16(b) of the Securities Exchange Act of 1934.  The court also rejected the plaintiff’s arguments that the blockers were ineffective because they could theoretically be amended by mutual agreement and that unsettled securities trades temporarily increased the investor’s beneficial ownership.  The decision provides guidance for issuers and investors that routinely rely on beneficial ownership blockers in structured equity transactions.

Background

In early 2023, BBB entered into an equity financing agreement in which the investor acquired convertible preferred stock and warrants.  The transaction documents included customary beneficial ownership blockers prohibiting the investor from converting preferred stock or exercising warrants to the extent doing so would cause it to beneficially own more than 9.99% of BBB’s outstanding common stock.  Following BBB’s Chapter 11 filing, its litigation successor alleged that the investor became a greater-than-10% beneficial owner by repeatedly converting securities, selling the resulting common stock, and converting additional securities. The plaintiff sought disgorgement of more than $310 million in alleged short-swing profits under Section 16(b).

The Second Circuit’s Decision

The Second Circuit concluded that the investor never became a greater-than-10% beneficial owner because the contractual beneficial ownership blocker prevented it from converting its securities or exercising its warrants in a manner that would cause its beneficial ownership to exceed the 9.99% cap.  The court also noted that trading records showed the investor’s beneficial ownership remained below the contractual threshold throughout the relevant period.  Accordingly, the investor was not subject to Section 16(b) liability on the theory that it was a greater-than-10% beneficial owner.  The plaintiff argued that the blockers should be disregarded because the governing agreements could theoretically be amended by mutual agreement. The Second Circuit rejected that argument, holding that the possibility of a future amendment did not negate an existing contractual restriction.  Because the investor could not unilaterally waive or disregard the blocker, the court concluded that the ownership limitation remained effective during the relevant period.

The plaintiff also argued that the investor temporarily exceeded the 10% threshold because shares it had agreed to sell remained unsettled while newly converted shares were added to its holdings.  The Second Circuit rejected that theory, explaining that beneficial ownership depends on an investor’s voting power or investment power over securities.

Takeaways

The Second Circuit’s decision confirms that:

  • properly drafted and complied-with beneficial ownership blockers may effectively prevent an investor from becoming a greater-than-10% beneficial owner for purposes of Section 16(b);
  • the possibility that contractual provisions could later be amended by mutual agreement does not, by itself, render those provisions ineffective; and
  • once an investor enters into a binding sale transaction, it generally no longer has investment power over those shares for purposes of determining beneficial ownership, even if settlement has not yet occurred.

The decision also provides helpful authority supporting the effectiveness of properly drafted beneficial ownership blockers commonly used in PIPE transactions, registered direct offerings, convertible preferred financings, warrant issuances, and other equity transactions.

On July 8, 2026, the staff (the “Staff”) of the Division of Corporation Finance (the “Division”) of the Securities and Exchange Commission (the “SEC”) issued a no-action letter (the “No-Action Letter”) in response to an incoming letter submitted on behalf of UBS Group AG (the “Incoming Letter”), addressing the application of the U.S. Securities Act of 1933 (as amended, the “Securities Act”) to the exchange or conversion of certain debt securities subject to the Swiss bail-in framework. 

The Incoming Letter sought the Staff’s confirmation that the Staff would not recommend the SEC take enforcement action in the event that the Swiss Financial Market Supervisory Authority (“FINMA”), the Swiss resolution authority, ordered a conversion of UBS Group AG’s (“UBS”) bail-in debt securities into new equity securities of UBS, pursuant to Swiss bail-in legislation. 

Bail-in securities are a type of financial instrument that qualifies as regulatory capital and are issued by bank holding companies or banks.  Depending on the specific resolution scheme applicable to such securities, should the bank issuing such securities fail or become likely to fail, the prudential regulator or banking agency with resolution authority (in this case FINMA) may exercise its bail-in powers (in combination with other resolution tools) to write down or convert, directly or indirectly, such bank’s bail-in securities, and if needed, other unsecured liabilities of the failed institution, into equity or other securities (such process, a “Bail-In”).  Bail-Ins are intended to allow a resolution authority to recapitalize a failing financial institution without relying on taxpayer funds.  UBS cited an earlier no-action letter from April 2026 in response to the Bank of England’s application relating to the exchange of certain debt securities under a UK-bail scenario, which we covered in a prior blog post.

Similar to the April 2026 no-action letter, the Division stated in the present No-Action Letter, that such an exchange of securities constitutes an “offer” and “sale” of securities within the meaning of Section 2(a)(3) of the Securities Act, but the Division will not take enforcement action in reliance on the opinion of applicant’s counsel that the Securities Act Section 3(a)(9) exemption is available.

Swiss Bail-In Framework

Pursuant to the bank resolution and restructuring regime of Switzerland, FINMA may only order a Bail-In if it determines that the financial institution, in this case UBS, has reached the point of “Insolvenzgefahr” (non-viability) pursuant to Article 25(1) of the Swiss Banking Act. Once FINMA determines an issuer has reached “non-viability,” FINMA would be authorized to order the full write-down or conversion of such issuer’s outstanding securities, including such issuer’s additional Tier 1 debt securities and Tier 2 debt securities in accordance with the contractual terms of these securities.  Following this write-down or conversion, the conversion Order would require the subsequent full reduction and/or cancellation of the issuer’s outstanding equity securities.  FINMA cannot order a Bail-In unless the resolution: (1) is based on a prudent valuation of the bank’s assets and liabilities along with a prudent estimate of the restructuring requirements, (2) is deemed not to be economically worse for creditors than the immediate initiation of insolvency proceedings, (3) takes into account the priority of creditors’ interests over those of the owners and the ranking of creditors appropriately and (4) adequately considers the legal and economic interconnection between assets, liabilities and contractual relationships.  In addition, the Swiss Banking Act addresses the sequence in which a write down or debt-to-equity conversion would occur in the event of Bail-in.

The request for relief set forth in the Incoming Letter was premised upon a direct conversion of the Bail-In securities into new equity securities of UBS Group AG as contemplated by the Swiss Banking Act, without the use of interim instruments.  This process is distinct from the bail-in mechanism addressed in the Bank of England’s No-Action Letter, whereby holders of the bail-in securities would be granted contingent beneficial interests known as “PROPPs” instead of being directly converted into news equity securities of the post-resolution entity.  However, similar to the PROPPs, there would be no additional consideration paid by holders of bail-in securities in connection with a Bail-In.

Section 3(a)(9) Exemption Applies

Section 3(a)(9) exempts from registration “any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly by or indirectly for soliciting such exchange.”  UBS was of the opinion that the conditions for reliance on Section 3(a)(9) would be met in connection with the above-described Swiss Bail-In resolution mechanism.  The Staff concluded that it would not recommend enforcement action if UBS, upon reaching non-viability and in reliance on an opinion of counsel that the exemption provided in Section 3(a)(9) is available, was directed by FINMA to convert its bail-in securities directly into new equity securities of UBS. The Staff also noted that UBS would remain the issuer of the new equity securities issued upon such Bail-In conversion.  This new no-action letter provides greater clarity on the SEC’s position relating to the applicability of the Section 3(a)(9) exemption in the case of a bail-in of a Swiss financial institution, especially since the failure of Credit Suisse (a Swiss financial institution) had precipitated questions on the applicability of Section 3(a)(9).

On July 9, 2026, the Securities and Exchange Commission’s Division of Corporation Finance issued a number of new Corporation Finance Interpretations (“CFIs”) (marking more than 150 new and revised CFIs since January 2025!).  The new CFIs focus on Exchange Act Sections 13(d) and 13(g), including guidance related to total return swaps on equity securities, while additional new CFIs focus on the proxy rules, Regulation Crowdfunding (“Reg CF”) and the tender offer rules.  The new CFIs regarding tender offers, in particular, reflect a modernization of the Division’s guidance in response to technological changes, a pattern we have seen from this Commission recently.  A summary of the new CFIs follows:

TopicGuidance
Exchange Act Sections 13(d) and 13(g) Question 105.08A person who enters into a standard total return equity swap that (i) settles exclusively in cash and (ii) only refers to a class of equity securities in order to identify a reference security, but does not confer  voting or investment power, or the right to acquire, such security (a “TRS”), is not deemed to acquire beneficial ownership (for purposes of Section 13(d) and Rule 13d-3) of the reference security, including any equity securities the counterparty may hold for hedging purposes, solely as a result of entering into the TRS.
Exchange Act Sections 13(d) and 13(g) Question 105.09A person who enters into a TRS would be “deemed” a beneficial owner of the reference securities, including any equity securities held by a counterparty to hedge its risk, if the TRS is directly or indirectly used in an “arrangement” to prevent the vesting of beneficial ownership by the TRS purchaser as part of a plan or scheme to evade reporting obligations.  Entry into a TRS for economic exposure to the reference security, without more, does not create such a scheme.
Exchange Act Sections 13(d) and 13(g) Question 105.10With regard to a TRS, “plan or scheme” to evade, as used in Rule 13d-3(b), is generally the intent to enter into a TRS that creates a false appearance contrary to the actual facts.  In other words, did the person know or was s/he reckless in not knowing that use of the TRS would create a false appearance that his or her interest is only economic?
Exchange Act Sections 13(d) and 13(g) Question 110.09An entity is formed specifically to raise funds to acquire securities of an issuer and engage in a related activism campaign.  Prospective investors in the entity are informed in advance of the specific purpose of the funds, including the identity of the issuer.  If the entity is required to report beneficial ownership of the issuer’s securities on a Schedule 13D, the identities of all of the investors in the entity must be disclosed in the Schedule 13D (see Item 3 of Schedule 13D regarding the source of funds used in purchasing the issuer’s securities).
Exchange Act Sections 13(d) and 13(g) Question 110.10When a Schedule 13D reporting person is a general or limited partnership and not a natural person, Instruction C to Schedule 13D requires listing persons and entities in addition to the reporting person when providing the information required by Items 2-6 of Schedule 13D (for example, general partners).
Proxy Rules and Schedules 14A/14C Question 155.02An entity is formed specifically to raise funds to acquire securities of a registrant and engage in a proxy solicitation to change the composition of the registrant’s board of directors.  Prospective investors in the entity are informed in advance of the specific purpose for the funds, the identity of the registrant and the reason for the proxy solicitation.  Each investor that invests more than $500 in the entity is a “participant” in the solicitation (see Instruction 3(a)(iv) to Item 4 of Schedule 14A).
Regulation Crowdfunding Question 202.02An issuer sold securities in a Reg CF offering, so has an ongoing reporting obligation under Rule 202(a) of Reg CF.  All of the over 300 investors in the offering invested through a crowdfunding vehicle compliant with Rule 3a-9 under the Investment Company Act of 1940.  However, the issuer cannot avail itself of Rule 202(b)(2) after it has filed one annual report, because, for purposes of Rule 202(b), “record holders” means investors in the offering, even if they invested through a single crowdfunding vehicle.  The reporting obligation continues until there are less than 300 investors, or the issuer is otherwise able to stop reporting.
Tender Offers Rules and Schedules Question 104.03In connection with a tender offer solely for cash and/or securities exempt from registration under Section 3 of the Securities Act,  an issuer can satisfy the disclosure requirement in Rule 13e-4(d)(3) via a press release that is issued as soon as practicable on the date of commencement of the offer through a widely disseminated news or wire service and contains (i) the disclosure required by Rule 13e-4(d)(3) and (ii) an active hyperlink to the tender offer materials and any related documents, provided that (a) the tender offer is not subject to Rule 13e-3 and (b) the issuer promptly furnishes the materials to any security holder who so requests.
Tender Offers Rules and Schedules Question 131.04A bidder in a tender offer may satisfy the disclosure requirement in Rule 14d-6 via a press release issued as soon as practicable on the date of commencement of the offer through a widely disseminated news or wire service that contains (i) the disclosure required by Rule 14(d)-6(d)(2) and (ii) an active hyperlink to the tender offer materials and any related documents, provided that (a) the tender offer is not subject to Rule 13e-3 and (b) the bidder reasonably promptly furnishes the materials to any security holder who so requests.

Find all the new CFIs here.

On June 23, 2026, the Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance (the “Division”) issued a new Corporation Finance Interpretation (“CFI”), providing guidance on the disclosure requirements when a company seeks to list rights on a national securities exchange in connection with a business combination transaction.

  New Question 142.01 under Section 142 pertaining to Section 8 of the Securities Act of 1933 (as amended, the “Securities Act”) addresses a scenario in which a company, in connection with a business combination, seeks to list rights on a national securities exchange without the underlying securities also being listed.  National securities exchanges require that a company have an effective registration statement prior to the rights being listed and that such registration statement register the issuance of the underlying securities upon exercise of the rights.

In this scenario, the Division confirmed that such company’s registration statement must contain information regarding the contemplated business combination transaction and the business to be acquired.  Now that the Division requires that details of the contemplated acquisition be disclosed, companies considering this approach would need to take into account that their registration statement contain disclosure about the target business and transaction terms.  Prior to this guidance, some companies might have taken the view that detailed disclosure may have been deferred until the rights were exercised.  See the full CFI here.