On February 28, 2019, the staff of the Securities and Exchange Commission’s Division of Investment Management issued a no-action letter to the Independent Directors Council permitting board members of a business development company to vote by telephone, video conference or other remote means in certain circumstances. This modernized position softens, but does not eliminate, the
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2019 REIT IPO Market Update
By Anna T. Pinedo & Brian Hirshberg on
Global REIT IPOs decreased dramatically – down 47 percent – from 49 REIT IPOs in 2017 to 26 REIT IPOs in 2018. This decrease reflects a difficult capital-raising market, with pressures from rising interest rates and a softening real estate market in the United States, and signals changes in future REIT fundraising activities.
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House Bill Would Mandate Rule 10b5-1 Study
By Brian Hirshberg on
Posted in SEC News
On January 18, 2019, Congresswoman Maxine Waters and Congressman Patrick McHenry introduced legislation that would require the Securities and Exchange Commission (the “Commission”) to carry out a study of Rule 10b5-1 trading plans. Rule 10b5-1 trading plans are passive investment agreements that provide an affirmative defense for companies and insiders (directors, officers and affiliated shareholders)…
NYSE Releases Updated Compliance Memo
By Brian Hirshberg on
Posted in Foreign Private Issuers, Public Companies
On January 10, 2019, the staff of NYSE Regulation released its annual memorandum detailing important rules and policies applicable to listed companies. The memorandum provides helpful reminders for issuers (noting important rule differences for domestic and foreign private issuers) with securities listed on the NYSE and also highlights new compliance items. In particular, as previously…
Legal Update: A Year to Remember for BDCs
By Brian Hirshberg on
With 2018 now in the rearview mirror, we summarize several of the encouraging regulatory developments for business development companies (“BDCs”) that occurred during 2018.
To learn more, read our Legal Update.
SEC Applies New Hedging Requirement to BDCs following Industry Silence
By Brian Hirshberg on
As detailed in our Legal Update, on December 18, 2018, the Securities and Exchange Commission (“SEC”) adopted a final rule requiring companies to disclose their hedging policies for employees, officers and directors. However, in a change from the proposed rule, the SEC decided not to apply the new disclosure requirement to listed closed-end funds…
SEC Proposes Fund of Funds Rule
By Brian Hirshberg on
On December 19, 2018, the Securities and Exchange Commission (the “SEC”) proposed a new rule (Rule 12d1-4) intended to modernize and improve the regulatory framework for fund of funds arrangements (fund investing in shares of another fund). Currently, funds are required to rely on existing statutory exemptions or exemptive rules or seek exemptive relief prior…
Lessons Learned from CAM Dry Runs
By Brian Hirshberg on
Posted in Financial Reporting, Public Companies
In 2017, the Public Company Accounting Oversight Board (“PCAOB”) adopted a new standard for auditor’s reports that requires a description of critical audit matters (“CAMs”) designed to provide investors with information that relates to accounts or disclosures that are material to a company’s financial statements and involve especially challenging, subjective or complex auditor judgment. The…
On point. – Pre-Funded Warrants
By Brian Hirshberg & Alex Speyer on
Posted in Pre-Funded Warrants, Resources
A pre-funded warrant allows its holder to purchase the issuer’s securities at a nominal exercise price (typically, $0.01 per share). Instead of waiting to receive proceeds following a warrant’s exercise, the issuer receives substantially all of the warrant’s proceeds upfront (without any conditions) as part of the warrant’s purchase price. In our recently published On …
SEC Expands Safe Harbor to Promote Research on Investment Funds
On November 30, 2018, the Securities and Exchange Commission (the “Commission”) adopted a new rule establishing a non-exclusive research report safe harbor (“Rule 139b”) for unaffiliated brokers or dealers that publish or distribute research reports regarding qualifying investment funds. The Commission took this action in furtherance of the mandate of the Fair Access to Investment…