The SEC Advisory Committee on Small and Emerging Companies ("ACSEC") examined (i) Regulation S-K disclosure requirements, (ii) research regarding corporate board diversity, and (iii) capital raising initiatives for small companies. In addition, the Division of Trading and Markets provided an update on equity market structure initiatives, the tick-size pilot, and the treatment of so-called "finders" that assist companies in capital-raising activities.
In a summary of the meeting, the Delta Strategy Group highlighted the following:
- Committee members agreed that financial disclosure for smaller and emerging companies should be focused on what investors want, more principles-based, and less repetitive.
- Promoting board diversity is within the purview of the SEC, and disclosure concerning board diversity is important to shareholders.
- The tick-size pilot program will last two years, during which time it will be evaluated on an ongoing basis.
- The SEC Division of Trading and Markets continues to craft an anti-disruptive trading rule to prohibit certain types of trading that can prove destabilizing during market stress.
- There is a lack of legitimate information available to small businesses that could assist them in raising capital. A coordinated effort among the SEC and other government agencies is needed to address the issue.
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