Medium-term note (“MTN”) programs enable companies to offer and sell a wide range of debt securities, which may have similar or different terms, on a periodic and/or continuous basis, by using pre-agreed offering and distribution documents and a simplified clearing process. With an MTN program, the issuer is able to use streamlined documentation for each offering and rely on the master program documentation and disclosure documents. Continue reading  our latest What’s the Deal? piece here.


Register by July 20, 2020
July 21, 2020 | 1:00pm EDT

Tomorrow, July 21, the George Washington University Law School’s Business and Finance Law Program and Better Markets will co-host a virtual conference on the 10-year anniversary of President Obama’s signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 for a look at the consideration, passage, and impact of the act, as well as a look forward at the challenges that remain and how to prevent future crashes.

The webcast will feature welcoming remarks by former President Barack Obama along with a keynote panel discussion with former Senator Chris Dodd and former Representative Barney Frank, moderated by NBC News Senior Business Correspondent and Anchor on MSNBC, Stephanie Ruhle.

The webcast will also include remarks by key Dodd-Frank participants in the historic events, including Senator Elizabeth Warren, House Financial Services Committee Chair Representative Maxine Waters, Former FDIC Chair Sheila Bair, former Deputy Treasury Secretary/Fed Governor Sarah Bloom Raskin, and Former Citibank/Citigroup CEO John Reed.

PIPE transactions were created to be an effective capital raising approach for public companies when there were few, if any, other satisfactory financing alternatives. While there are now a number of other confidentially marketed securities offering methodologies, for the reasons discussed in this article, PIPE transactions may be the most efficient or only alternative for many issuers.  As noted in prior posts, many public companies are finding that, in this environment, capital injections by private equity and other financial sponsors are best structured as PIPE transactions.  These transactions raise a number of considerations, which are discussed in more detail in this article.

Continue reading, PIPEline: Sponsor-Led PIPE Transactions in Volatile Markets, published by the PLI Current, the Journal of PLI Press.

In a recent speech, SEC Commissioner Roisman shared his own views regarding ESG disclosures.  The Commissioner touched on the difficulty associated with defining “ESG.”  Specifically, he noted that corporate governance perhaps should be considered separately from the “E” and “S”.  The Commissioner also noted that there is an element of subjectivity associated with the issues that fit under the broad ESG rubric, and this subjectivity poses a challenge especially when considering whether to mandate prescriptive disclosure on ESG.  The Commissioner acknowledged the recommendations of the Investor Advisory Committee on these disclosures.  Quite appropriately, I think, the Commissioner noted that often discussions regarding ESG matters take on a political or moralistic tone.  In this regard, Commissioner Roisman commented, “It is too easy to fall into the trap of categorizing people in ways that obviate the need to address the substance and merits of ESG issues.  But, this makes policy discussions turn personal and almost always less productive.”  Commissioner Roisman noted that, personally, he did not favor mandating prescriptive disclosures in this area.  He focused on the materiality standard, which has guided all disclosure requirements.  To the extent ESG issues are material to a reporting company, the principles-based disclosure framework would require that the company make necessary disclosures.  He touched on a few examples of instances in which Congress has mandated that the SEC require that public companies make certain disclosures, such as the disclosures mandated for resource extraction issuers, and the many challenges that such SEC rules subsequently faced.  So while the Commissioner clearly does not personally favor prescriptive ESG disclosures for public companies, and would let the principles-based disclosure framework continue to guide issuer disclosures of policies or developments material to an issuer, the Commissioner explained he does favor additional regulation for asset managers.

For asset managers that make claims regarding their use of ESG metrics to drive investment decisions, or that tie returns to ESG related investment strategies, additional disclosures in may be necessary.  Funds, for example, should more clearly define the use of terms like “sustainable,” “green,” etc., since there are no uniform definitions or common understandings related to ESG related terminology so that retail investors can form a better understanding of the potential or actual investments, as well as the degree to which social impact may be prioritized over financial returns.  Commissioner Roisman notes:  “it would make sense to me that asset managers who want to use these terms to name their funds or advertise their products should be required to explain to investors what they mean.”  See the full text of the Commissioner’s remarks here.



On July 22, 2020, the Securities and Exchange Commission will hold an open meeting to consider whether to adopt proxy related amendments.  The SEC will consider whether to adopt proxy rule amendments that would provide investors who use proxy voting advice with more transparent, accurate, and complete information on which to make voting decisions.  The SEC also will consider whether to publish supplementary guidance to the Commission Guidance Regarding Proxy Voting Responsibilities of Investment Advisers, Release No. IA-5325 (Aug. 21, 2019), 84 FR 47420 (Sept. 10, 2019), regarding how the fiduciary duty and Rule 206(4)-6 under the Investment Advisers Act of 1940 relate to an investment adviser’s proxy voting on behalf of clients.  See the notice for additional details.

The SEC Office of the Investor Advocate is required to produce and deliver to Congress a report on its objectives for the subsequent fiscal year.  Just recently, the Investor Advocate released and delivered its report outlining the principal objectives for the fiscal year 2021.

The report expresses growing concern regarding the Securities and Exchange Commission’s efforts to “expand” the private markets and the potential unintended consequences of weakening the public markets, the ability of investors to cast votes efficiently and have their votes counted accurately, and to obtain advice without interference from company management.  The Investor Advocate also pledges to remain “vigilant” in reviewing policies relating to novel exchange-traded funds and broker conduct.  Specifically, with respect to the SEC’s disclosure effectiveness initiative, the Office will consider the utility of more prescriptive disclosures relating to human capital.  The Office will consider the “growing obsolescence of the current registration and reporting regime” as the SEC expands the exemptions from registration requirements.  As in prior years, the Office will continue to focus on developments in the ETF marketplace and, in particular, on concerns regarding non-transparent ETFs, leveraged and inverse ETFs, and related products that may pose a risk to retail investors.  The Office also will monitor the implementation of Regulation BI.  The Investor Advocate includes a special report on the impact on investors from COVID-19.

The report is available here.


Late last week, the House Appropriations Committee approved a bill that addresses the budgets for among other agencies, the Securities and Exchange Commission.  While the bill would authorize an increase in the SEC budget for fiscal year 2021, it comes with strings.  The bill contains a section, Section 540 (repeated below), which would condition spending unless the SEC were to take further actions in connection with advancing the measures that were included in the March 2020 proposing release on Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets to review market practices in connection with Rule 506 offerings involving general solicitation.  The SEC’s proposing release included data for 2019 on the Regulation D market.  The data showed that the vast majority of Regulation D offerings were made in reliance on Rule 506(b) (which does not allow for general solicitation).  In 2019, there were 24,636 offerings made in reliance on Rule 506(b) (raising $1.5 trillion) versus only 2,269 offerings made in reliance on Rule 506(c) (raising $66.3 billion).   Of course, the proposing release would do little to modify existing Rule 506, so the Section 540 rider is unusual.   The appropriations bill has a long way to go before adoption, but it is interesting that the House would suggest reviving proposed changes to Regulation D, which, in 2013 were met with generally negative feedback from commenters.

SEC. 540.  None of the funds made available by this Act may be used to finalize, issue, or implement any rule, regulation, or order regarding the exempt offering framework changes proposed at 85 Fed. Reg. 17956 without previously finalizing, issuing, or implementing a final rule strengthening the filing requirements around exempt offerings in the same or stronger manner as proposed at 78 Fed. Reg. 44806 to enhance the Securities and Exchange Commission’s ability to evaluate the development of market practices in Rule 506 offerings and to address concerns that may arise in connection with permitting issuers to engage in general solicitation.


Intelligize Webinar
August 12, 2020
1 pm – 2 pm EDT
Register here

Direct listings are an alternative to the traditional IPO process that has generated much attention lately.  A U.S. or foreign-domiciled company may choose to register a class of its securities under the Securities Exchange Act of 1934 and list its stock on a national securities exchange without undertaking an offering of its securities at the same time.  The SEC’s Division of Corporation Finance recently changed its policy and now allows an issuer to submit for confidential review a Form 10 or Form 20-F for this purpose.  During this Intelligize webinar, we will cover:

  • Expanded Confidential Review of Registration Statements;
  • Expanded Ability to Engage in Test the Waters Communications;
  • Overview of Direct Listings;
  • Documentation Requirements for a Direct Listing;
  • Current Exchange Requirements, and Proposed Exchange Rules to Allow Fundraising in Direct Listings; and
  • Securities Liability, Tracing Requirements, and Related Considerations in Connection with a Direct Listing

On July 9, 2020, SEC Office of Internal Affairs Director Raquel Fox and SEC Division of Corporation Finance Director William Hinman moderated a panel discussion concerning the disclosure and reporting considerations of investments in emerging markets.

The panel discussed the disclosure considerations associated with investments in emerging markets in general, and particularly, in China.

To enhance existing risk disclosures, the panelists proposed and suggested that affected issuers, including those operating primarily in China:

  • Provide discussions on material operations and risks regarding related-party transactions, the regulatory environment, uncertainties in interpretation of existing regulations, foreign ownership restriction, and tax-related matters.
  • Highlight as separate risk factor disclosures those pertaining to the limitation on the PCAOB auditor inspection and working paper access, inability of companies to comply with U.S. laws due to foreign jurisdiction’s laws (e.g. Article 177 of the PRC Securities Laws), and the inability of the SEC and the U.S. DOJ to conduct investigations or their lack of oversight.
  • Identify the material differences (and explain the implications of these differences) between the corporate governance, practices, and reporting requirements in the United States and in China.

A webcast archive of the panel discussion will be available on the SEC website.