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November 2007 Published by RR Donnelley Editorial Content by LegalWorks Blake A. Bell, Editor in Chief In This Issue:
SEC I: SEC Affirms its Policy on Shareholder Proposals on Election Procedures
The SEC issued the proposals in response to the decision of the United States Court of Appeals for the Second Circuit in AFSCME v. AIG, 462 F.3d 121 (2nd Cir. 2006). There the Court held that companies may not rely on Rule 14a-8(i)(8) to exclude a shareholder proposal that, if adopted, would permit shareholders to force the company to bear the expense of including shareholder content in the company's proxy materials in contested elections without the disclosures required by the Commission's proxy rules. According to the Commission, Rule 14a-8 provides an opportunity for a shareholder owning a relatively small amount of a company's securities to submit a proposal for inclusion in a company's proxy materials, provided that the shareholder complies with certain procedural requirements and the proposal does not fall within one of thirteen substantive bases for exclusion. One of the thirteen substantive bases for exclusion, Rule 14a-8(i)(8), permits a company to omit from its proxy materials any proposal that "relates to an election for membership on the company's board of directors or analogous governing body." The Commission voted to amend the language of the rule to read as follows: "If the proposal relates to a nomination or an election for membership on the company's board of directors or analogous governing body or a procedure for such nomination or election." This language was not revised from the proposal. The rule will take effect 30 days after publication in the Federal Register. RealCorporateLawyer.com is pleased to make available in-depth analysis of the three measures adopted by the Commission. See:
SEC II: Commission Adopts Proxy Rule Amendments To Encourage Electronic Shareholder Forums
In its statement announcing the development, the Commission included a quotation from John White, Director of its Division of Corporation Finance, saying, "This new proxy rule exemption should help facilitate another venue for interested investors to share thoughts and ideas with company management and among themselves." RealCorporateLawyer.com is pleased to make available in-depth analysis of the three measures adopted by the Commission. See:
SEC III: SEC Releases a Prototype "Summary Prospectus" for Mutual Funds and Solicits Public Comment
According to the SEC's announcement: "The Commission is proposing that the following information be included in a mutual fund summary prospectus:
SEC IV: SEC Approves Rule Amendments to Accept Financial Statements from Foreign Private Issuers Prepared Using IFRS Without Reconciliation to GAAP
The Commission also announced during its meeting that it will convene two roundtables (on December 13 and 17) to collect more feedback "on the issue of giving U.S. domestic issuers the same option that foreign issuers have in our markets to use either IFRS or U.S. GAAP."
SEC V: SEC Adopts Three Rules To Improve Small Business Regulation
The amendments address some of the important recommendations contained in the Final Report issued by the SEC's Advisory Committee on Smaller Public Companies. RealCorporateLawyer.com is pleased to make available in-depth analysis of the three measures adopted by the Commission. See:
SEC VI: SEC Proposes Rule Changes to Give Internet Access to Exemptive Applications
Specifically, the Commission issued an EDGAR rulemaking release on November 1 proposing to amend rules to make mandatory the electronic submission on EDGAR of applications for orders under any section of the Investment Company Act and Regulation E-filings of small business investment companies and business development companies. The Commission also proposed to amend the electronic filing rules to make the temporary hardship exemption unavailable for submission of applications under the Investment Company Act. Additionally, the 41-page proposing release proposes amendments to Rule 0-2 under the Investment Company Act to eliminate the requirement that certain documents accompanying an application be notarized and the requirement that applicants submit a draft notice as an exhibit to an application.
PRACTICAL GUIDANCE: Courtesy of RealCorporateLawyer.com RealCorporateLawyer.com provides its readers with free access to a very large collection of law firm memoranda providing practical guidance on current hot topics. Readers are encouraged to visit the frequently-updated "Emerging Legal Issues" area of the home page for such current memoranda, as well as the Expert Analysis: SEC Reform Portal section containing hundreds of other such memoranda. Recent additions include:
COMINGS AND GOINGS: Who's Doing and Saying What and Where? On November 29, the SEC announced that Peter Bresnan, Deputy Director of Enforcement, Will Leave to become a partner with Simpson Thacher & Bartlett LLP in the firm's Washington, D.C. office. See U.S. Securities and Exchange Commission, Peter Bresnan, Deputy Director of Enforcement, to Leave Commission, News Release 2007-248 (Nov. 29, 2007). The Commission announced on November 27 that Thomas J. Kim has been named Chief Counsel and an Associate Director of the Agency's Division of Corporation Finance. He has served as Counsel to SEC Chairman Christopher Cox since 2006. See U.S. Securities and Exchange Commission, Tom Kim Named Chief Counsel in Division of Corporation Finance, News Release 2007-245 (Nov. 27, 2007). Also on November 27, the SEC announced the appointment of Kay Lackey as Associate Regional Director in the New York Regional Office. Previously she was an Assistant Regional Director of Enforcement in New York. See U.S. Securities and Exchange Commission, Kay Lackey Named Associate Regional Director for Enforcement in SEC's New York Regional Office, News Release 2007-243 (Nov. 27, 2007). On November 26, the Commission announced that Elizabeth G. Osterman has been named Associate Director of Exemptive Applications and Special Projects in the Division of Investment Management. She previously has served as Assistant Chief Counsel, Financial Institutions in the Division of Investment Management's Office of Chief Counsel since 2000. See U.S. Securities and Exchange Commission, Elizabeth G. Osterman Named Associate Director in the Division of Investment Management, News Release 2007-242 (Nov. 26, 2007). The Commission announced on November 20 that Wayne Carnall has been named Chief Accountant of the Division of Corporation Finance. He has been a partner at PricewaterhouseCoopers since 1997. See U.S. Securities and Exchange Commission, Wayne Carnall Named Chief Accountant in Division of Corporation Finance, News Release 2007-239 (Nov. 20, 2007). Also on November 20, the Commission named Brian V. Breheny as Deputy Director in its Division of Corporation Finance. He has served as Chief of the Office of Mergers and Acquisitions in the Division of Corporation Finance since July 2003. See U.S. Securities and Exchange Commission, Brian Breheny Named Deputy Director in Division of Corporation Finance, News Release 2007-238 (Nov. 20, 2007). The Commission announced on November 9 that it has appointed Kevin Goodman as the Associate Regional Director of Examinations in its Denver Regional Office. He has more than 15 years of experience in the Commission's exam program. See U.S. Securities and Exchange Commission, Kevin Goodman Named Associate Regional Director for Examinations in SEC's Denver Regional Office, News Release 2007-228 (Nov. 9, 2007). The PCAOB announced on October 29 that its CFO, Tom Hohman, Informed the Board that He is Resigning From His Position to Become CFO of a Private Company. See Public Company Accounting Oversight Board, PCAOB Announces Resignation of CFO Tom Hohman (Oct. 29, 2007). On October 26, the SEC named Steve Korotash Associate Regional Director of Enforcement in the Commission's Fort Worth Regional Office. He recently has served as the Chief Trial Attorney for the same Office. See U.S. Securities and Exchange Commission, Steve Korotash Named Associate Regional Director for Enforcement in the SEC's Fort Worth Regional Office, News Release 2007-222 (Oct. 26, 2007). What Are the Commissioners and Commission Staffers Saying? SEC Chairman Christopher Cox spoke at the Commission's November 28 open meeting regarding "Electronic Shareholder Forum Rules: Codification of Interpretation of Rule 14(a)(8)(i)(8)". Commissioner Annette L. Nazareth delivered a statement at the same meeting: "Opening Statement -- Shareholder Proposals Relating to the Election of Directors". One day earlier, Chairman Cox delivered "Introductory Remarks at the 2007 SBR/XBRL International Conference". Chairman Cox also spoke during the Commission's November 15 open meeting, delivering a statement regarding "Mutual Fund Prospectus Simplification: Financial Statements Using IFRS; Small Business Capital Formation, Simplified Reporting, and Disclosure Reforms". At the same meeting he delivered a "Statement on Fiscal 2007 Enforcement Results". Commissioner Paul S. Atkins delivered two statements during the same meeting: (1) "Open Meeting Statement on Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with IFRS"; and (2) "Open Meeting Statement on Mutual Fund Prospectus Disclosure and Delivery". On November 14, Chairman Cox delivered an "Address to the 2007 CCOutreach National Seminar". Commissioner Nazareth delivered "Remarks Before the Securities Industry and Financial Markets Association Annual Meeting" on November 9. Chairman Cox delivered three additional speeches in early November: (1) "Learning from the Shogun -- Toward IOSCO's Vision of a Global Market" (Nov. 8); (2) "Remarks at the Opening of the SEC Visitors Center Historic Exhibit" (Nov. 1); and (3) "Remarks at the SEC Historical Society Symposium - Keeping the Markets Open - Lessons Learned from the 1987 Market Break". Once again, Commission Staffers were also busy on the lecture circuit. During the Commission's Nov. 28 open meeting, the SEC's Senior Special Counsel to the Director of the Division of Corporation Finance, Tamara Brightwell delivered a "Division Statement Before the Commission Open Meeting Regarding Electronic Shareholder Forums". During the same meeting Lilian C. Brown, Senior Special Counsel to the Director of the Division of Corporation Finance, delivered a "Division Statement Before the Commission Open Meeting Regarding Shareholder Proposals Relating to the Election of Directors". The same day Andrew J. Donohue, Director of the Commission's Division of Investment Management, delivered a "Keynote Address at the Investment Company Directors Conference". Also on November 28, the Commission's Director of the newly renamed Division of Trading and Markets, Erik R. Sirri, delivered "Remarks Before the AICPA/FMD National Conference on the Securities Industry". Several SEC Staffers spoke during the Commission's November 15 open meeting: (1) Special Counsel in the Office of International Corporate Finance, Michael D. Coco delivered "Opening Remarks"; (2) the SEC's Chief Accountant, Conrad Hewitt, also delivered "Opening Remarks"; (3) Katrina A. Kimpel, a Professional Accounting Fellow in the Office of the Chief Accountant, likewise delivered "Opening Remarks"; (4) Johanna Vega Losert, an Attorney-Advisor in the Division of Corporation Finance, delivered an "Opening Statement of the Division of Corporation Finance"; and (5) John W. White, Director of the Division of Corporation Finance, delivered his own "Opening Remarks". On November 14, the Director of OCIE, Lori A. Richards, delivered "Welcome and Closing Remarks Before the CCOutreach National Seminar". The same day, Erik Sirri spoke regarding "Electric Money: Trading in the 21st Century". Andrew J. Donohue also delivered "Opening Remarks Before the CCOutreach National Seminar" on November 14. Gene Gohlke, Associate Director of OCIE, spoke on November 8 regarding "If I Were a Director of a Fund Investing in Derivatives -- Key Areas of Risk on Which I Would Focus". The same day, the Commission's Director of the Division of Enforcement, Linda Chatman Thomsen, delivered "Remarks Before the 2007 ALI-ABA Life Insurance Company Products Conference". And, finally, on November 6 Andrew J. Donohue spoke yet again, delivering the "Keynote Address at the Investment Company Directors Conference".
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©2008 RR Donnelley This free E.Zine is provided for informational purposes only and does not constitute legal advice. RR Donnelley & Sons Company is not engaged in rendering legal or other professional services. Publication on this E.Zine is not intended to create, and the information contained hereon does not constitute, an attorney-client relationship. Do not act or rely upon the information and advice given in this publication without seeking the services of competent professional counsel. The RR Donnelley Financial Services Group provides a range of solutions to address all of your business communications needs. We offer financial printing services to the capital and investments markets, as well as judgment-based outsourcing and real estate services. Through our integrated global network, we file more than 50,000 documents annually with the SEC and produce many of the critical documents for regulatory compliance and financial transactions. Our BPO services leverage an on-site/offshore delivery model, leading subject matter experts and state-of-the-art, global operations to assume functions of our clients' business. We add value through highly personalized and around-the-clock service, single-source solutions, Venue virtual data rooms, worldwide regulatory and industry expertise, and insight that comes from over 140 years of experience and achievement. For more information, visit us at www.financial.rrd.com or www.RealCorporateLawyer.com , a reference resource site for corporate and securities lawyers.
RR Donnelley Financial is a business of RR Donnelley (DNY).
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