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News
News from our committees on business law topics, announcements and more.
Annual Letter from Larry Fink of BlackRock
BlackRock has $8.7 trillion AUM. So, securities issuers pay close attention to Larry Fink’s and Blackrock’s investment priorities.
Financial Advisers and Investors Face a Crazy Quilt of State Regulations
New state rules come on top of federal requirements. If you’re confused, you aren’t alone. The muddle of state regulation traces to the SEC’s adoption of a less-strict investor-protection measure than some had argued for.
Investment Adviser Advertising Rule Effective Date is May 4
The Investment Adviser Advertising Rule has been published in the Federal Register. I attach it. Thus, the effective date is May 4, 2021.
Reuters: U.S. SEC should revisit disclosure requirements on diversity - acting chair
I can see the argument that diversity statistics may be something that institutional investors (many of whom have diverse investors or beneficiaries) may want to have. If Vanguard/BlackRock/Fidelity etc. went on the record saying that they want this disclosure to better serve their diverse investors and beneficiaries, that would be a good thing. There also may be some studies tying diversity to better performance, but I am not up to speed on the academic literature in this area.
Richard Latham
Denny Crawford reports that her predecessor as Texas Securities Commissioner, Richard Latham, passed away last month. (Denny was Richard’s general counsel at the agency).
SEC Acting Chair: Public Input Welcomed on Climate Change Disclosures
In light of demand for climate change information and questions about whether current disclosures adequately inform investors, public input is requested from investors, registrants, and other market participants on climate change disclosure.
SEC Corp Fin Sample Letter to Companies Regarding Securities Offerings During Times of Extreme Price Volatility
The Division of Corporation Finance recognizes the importance of capital formation, including during times of market volatility and when an issuer’s own securities are experiencing extreme price volatility. The Division also cautions that such market and stock volatility can create risks for both companies and investors. These risks can be particularly acute when companies seek to raise capital during periods with: • recent stock run-ups or recent divergences in valuation ratios relative to those seen during traditional markets, • high short interest or reported short squeezes, and • reports of strong and atypical retail investor interest (whether on social media or otherwise).
SEC Division of Examinations 2021 Examination Priorities (attached)
The Securities and Exchange Commission’s Division of Examinations today announced its 2021 examination priorities, including a greater focus on climate-related risks. The Division will also focus on conflicts of interest for brokers (Regulation Best Interest) and investment advisers (fiduciary duty), and attendant risks relating to FinTech in its initiatives and examinations. The Division publishes its examination priorities annually to provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets.
SEC increases Emerging Growth Company Revenue Threshold, leaves Crowdfunding threshold unchanged.
Per the attached release, the SEC has increased the Emerging Growth Company maximum revenue threshold to $1,235,000,000. The Crowdfunding threshold is unchanged.
SEC kills contingent offers of settlement
The SEC will no longer allow contingent offers of settlement – that is an offer of settlement contingent on the granting of bad actor waivers. Acting Chair Lee seems to have the position that allowing contingent offers of settlement means that bad actor waivers can be priced in settlement discussions.
SEC report says SEC Ombudsman neglected duties
Findings Related to the Former SEC Ombudsman The U.S. Securities and Exchange Commission (SEC) Office of Inspector ...
SEC Risk Alert on Investment Adviser Rule
The SEC issued a risk alert on Monday (attached) about the new SEC’s Investment Adviser marketing rule, which becomes effective on November 4, 2022. It is worth a read.
Supreme Court rejects petition on extension of broker-dealer registration beyond secondary markets
From Wolters Kluwer: Supreme Court denies review of two unremarkable securities cases, one involving broker-dealer registration and second case involving the application of the investment contract definition to LLC interests.
Texas Securities Act Amendment filed!
The attached recodified Texas Securities Act amendment was filed today in both the House and the Senate. As a reminder, the recodified TSA becomes effective next January. The bill would amend the recodified Texas Securities Act civil liability provisions to remove cross-references to TSA provisions that impose no duties on private actors.
Texas Securities Act Revised and Codified
The Texas Securities Act recodification bill has been filed in the 86th session of the Texas Legilature.
TSA amendment proposal received press in Texas Lawyer
The Texas Lawyer buried the Securities Committee’s bill in the last two paragraphs of the story. Perhaps that is a sound use of editorial discretion?
CSC 2019 Legislative Developments #24
This will be the last regular Friday update for 2019. I’ll send one more update before the end of June and thereafter when there are sufficient developments to report. The regular Friday updates will resume in January 2020. Here are the most significant developments since the last update on 6/7/2019:
The SEC Provides an Opinion Letter Regarding Blockchain Settlement Service for Public Shares
Concerns blockchains and Clearing Agency Registration Under Section 17A(b)(1) of the Securities Exchange Act of 1934.
Status of the Committee Reports
The following are links to works by the Legal Opinions Committee
Legal Opinions Resources
The Legal Opinions Committee of the Section has been working with the Legal Opinions Committee of the ABA's Business Law Section and the World Group on Legal Opinions Foundation to craft a Statement of Opinion Practices to be used by practitioners who regularly give legal opinions about various subjects to their clients. You can find the Statement of Opinion Practices, the related Core Opinion Principles and an Explanatory Note in our Legal Opinions Committee page. Click here to see the materials:
Divided SEC Approves PCAOB’s Quality Control Standard
The Securities and Exchange Commission (SEC) on September 9, 2024, voted 3-2 to approve the Public Company Accounting Oversight Board’s (PCAOB) new quality control (QC) standard that imposes a combination of principles-based and prescriptive requirements to make sure that audit firms have a robust QC system to better protect investors.
Divided SEC Approves PCAOB’s Quality Control Standard
The Securities and Exchange Commission (SEC) on September 9, 2024, voted 3-2 to approve the Public Company Accounting Oversight Board’s (PCAOB) new quality control (QC) standard that imposes a combination of principles-based and prescriptive requirements to make sure that audit firms have a robust QC system to better protect investors.