SEC

Subscribe to SEC RSS Feed

SEC Committee Discusses ESG Disclosure Requirements and D&I

On March 19, 2021, the SEC’s Asset Management Advisory Committee (AMAC) held a meeting to discuss the December 2020 potential recommendations that its ESG Subcommittee provided to the SEC on ESG disclosure requirements. During the meeting, the Diversity & Inclusion (D&I) Subcommittee of AMAC also made potential recommendations to improve D&I in the asset management industry.
Continue Reading

SEC Signals Support for Single Global ESG Disclosure Framework

Today, the SEC released a statement by Division of Corporation Finance Acting Director John Coates on ESG disclosure. In this post, we provide our observations on what his statement may indicate about the direction of globally coordinated efforts on ESG disclosure.

Acting Director Coates is interested in developing global ESG disclosure standards, stating that the SEC “should help lead the creation of an effective ESG disclosure system.”
Continue Reading

Davis Polk Client Memo: SEC Establishes Enforcement Division Climate and ESG Task Force

Yesterday, the Securities and Exchange Commission announced a newly created Climate and ESG Task Force in the Division of Enforcement. The announcement is a reminder for public companies, investment advisers and funds to prepare for increased enforcement scrutiny regarding ESG disclosures, plans, and investment products. The new task force also is the latest signal of an effort to portray an SEC enforcement program that is both more aggressive and increasingly focused on specific policy objectives.
Continue Reading

SEC Chair Nominee Gensler and SEC’s 2021 Examination Priorities Highlight ESG and Climate Risk

SEC Chair Hearing.  Yesterday, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a nomination hearing to consider Gary Gensler’s candidacy for Chair of the Securities and Exchange Commission, or SEC. Throughout the hearing, Gensler fielded numerous questions on environmental, social and corporate governance and disclosure matters. This post synthesizes the most salient points from his testimony.
Continue Reading

Davis Polk Client Alert: SEC to Review Climate-Related Disclosure

Yesterday, the SEC released a statement on climate change disclosures. The statement directs the SEC staff to review company disclosures against its 2010 climate change disclosure guidance. In light of these events, this client alert provides our prior comprehensive summary of the SEC’s 2010 guidance and identifies what issuers should do in the short and long term to be prepared for future regulatory action.
Continue Reading

SEC Extends Review Period for Nasdaq’s Board Diversity Proposal

On the heels of our post of our summary deck yesterday on Nasdaq’s December 2020 Board Diversity Proposal, the SEC announced last night that it needs more time to consider Nasdaq’s proposal and associated comment letters.  With the extension, the SEC has until March 11, 2021 to either approve or disapprove the proposal, or institute proceedings to aid its determination.  
Continue Reading

Nasdaq’s Board Diversity Proposal

The SEC continues to consider and take public comment on Nasdaq’s December 2020 Board Diversity Proposal. That proposal, if approved as written, would require Nasdaq-listed issuers to disclose their board diversity composition annually and eventually have two “diverse” directors on their boards, or explain why not. Limited exceptions would also apply.

There’s been much speculation as to whether the SEC will approve these proposed amendments to Nasdaq’s listing requirements, decline to do so, or propose, at some point in time, its own board diversity disclosure requirements.
Continue Reading

Davis Polk Client Memo: Financial Services Regulatory Reform in the Biden Administration – Key Areas of Focus

This deck describes our view of the road ahead for financial regulatory reform under a Biden Presidency and a Republican Senate.  We see most of the action coming from the regulators, not Congress.  If the Senate ultimately turns Democratic, that view may change and we will update this deck.

Read the full memo here.
Continue Reading

Davis Polk Client Memo: Stock Buybacks Under 10b5-1 Plan Draw SEC Rebuke

In a first-of-its-kind case, the SEC focused on a company’s accounting controls around Rule 10b5-1 buybacks and imposed a $20 million fine. The novel theory in the case highlights the need for policies and procedures around stock buyback authorizations and the entry into of 10b5-1 plans, including procedures a company needs to follow to determine that it is not in possession of MNPI when it enters into a 10b5-1 buyback plan.
Continue Reading

Davis Polk Client Memo: SEC Maintains Its Focus on Perk Disclosures

The SEC has shown its willingness to continue to take companies to task for not disclosing perquisites and personal benefits to executive officers in a manner that is consistent with the SEC’s expectations.  Unfortunately, the SEC’s standard is often challenging to put into practice.

This memo highlights recent SEC guidance on potential perks related to the COVID-19 pandemic, describes the SEC’s latest enforcement activity and summarizes the recent series of SEC enforcement activity involving executive perks.
Continue Reading

SEC Asset Management Advisory Committee Provides Updates on Diversity and Inclusion Research and Recommendations

On September 16, 2020, the SEC’s Asset Management Advisory Committee, or AMAC, hosted a webcast to further discuss diversity and inclusion issues in the asset management industry initially addressed at its last meeting on July 16, 2020.  AMAC has held these meetings to provide incremental updates on its efforts to prepare and deliver to the SEC final recommendations on improving D&I in the asset management industry.  
Continue Reading

Davis Polk Client Memo: SEC Amends Shareholder Proposal Rule

On September 23, 2020, the SEC adopted amendments to the shareholder proposal rule. Rule 14a-8 allows a shareholder that meets certain requirements to use a company’s proxy statement to have its proposal voted on by all shareholders. Our memorandum describes the most salient points of the amendments.

Read the full memo here.
Continue Reading

Davis Polk Client Memo: SEC Updates Business, Legal Proceedings and Risk Factors Disclosure

On August 26, the SEC adopted amendments to update the business description, legal proceedings and risk factor disclosures that U.S. companies make in registration statements, annual reports and quarterly reports. In making these changes, the SEC is taking a more tailored and “principles-based” approach to disclosure, with the intention of simplifying compliance for companies and improving information provided to investors.
Continue Reading

SEC Called Upon to Take Action on Diversity & Inclusion in the Asset Management Industry

The SEC’s Asset Management Advisory Committee hosted a meeting on July 16, 2020 to discuss the current state of diversity and inclusion (D&I) in the asset management industry.  SEC Chairman Jay Clayton, SEC Commissioner Elad Roisman and Director of the SEC’s Division of Investment Management Dalia Blass opened the meeting.  Each expressed an interest in understanding why minority- and women-owned firms make up only approximately 1.3% of the total assets under management in the global asset management industry.
Continue Reading

SEC Urged to Mandate Disclosures on COVID-19 Risks and Responses

On June 15, 2020, Americans for Financial Reform (AFR), a nonprofit coalition founded in the wake of the 2008 financial crisis, called on the Securities and Exchange Commission (SEC) to require public companies to disclose how they are protecting employees from coronavirus (COVID-19), citing that consistent, comprehensive information is critical to investors and public health.

Although the SEC Division of Corporate Finance issued Staff Guidance in March 2020 providing companies with its views on COVID-19 disclosures, followed by a joint statement on COVID-19 disclosures in April 2020 by SEC Chairman Clayton and Corp Fin Director Hinman which statement recommended that companies “provide as much information as is practicable” about how they are responding to the pandemic, AFR claims that these efforts were only one step in the right direction.
Continue Reading

SEC Asset Management Advisory Subcommittee Provides Report on ESG Practices in Asset Management Space

Earlier today, the Securities and Exchange Commission (“SEC”) held an open virtual meeting with the Asset Management Advisory Committee to discuss the impact of the coronavirus (“COVID-19”) and, in particular, to hear updates and recommendations from its subcommittee on ESG (the “ESG Subcommittee”).  The ESG Subcommittee provided an overview of its current areas of research, which has taken the form of five separate workstreams. 
Continue Reading

LexBlog