A&O Shearman are most popular:
- within Consumer Protection, Insolvency/Bankruptcy/Re-Structuring and Insurance topic(s)
On 6 October 2017, the U.S. Department of the Treasury released a report on reforming the U.S. regulatory system for the capital markets (the “Capital Markets Report”). The Capital Markets Report includes 91 recommendations directed at financial regulators and Congress, many of which are targeted at the SEC.
Highlighted below are two of the main categories of recommendations addressed in the Capital Markets
Report:
- Reducing Public Company
Obligations:
- For public companies and companies considering an IPO, the Capital Markets Report includes recommendations to: (a) repeal Dodd-Frank Act rulemaking mandates related to conflict minerals, resource extraction payments, mine safety and pay ratio disclosures, (b) reform the shareholder proposal process to make it harder for shareholders to submit proposals to be voted on at annual shareholder meetings and (c) review the role and regulation of proxy advisory firms.
- The Capital Markets Report also recommends that the regulatory flexibility provided to newly public companies
- and smaller already reporting companies be extended, including by broadening the eligibility requirements for the scaled disclosure and reporting requirements applicable to smaller reporting companies from $75 million public float cap to a $250 million public float cap.
- It also encourages the SEC to move forward on the various rule proposals and reports it has prepared related to its project to revise and reform its disclosure rules to make public company disclosures more effective. For additional information, please refer to “SEC Proposes Modernization and Simplification of Disclosure Rules” above.
- Finally, it recommends that state governments and the SEC investigate ways to reduce the costs of securities litigation, including through the use of arbitration.
- Promoting Capital
Formation:
- A series of recommendations focuses on revising the recent SEC rules related to the crowdfunding and Regulation A+ private offering exemptions, including increasing caps on the amount of capital that can be raised.
- Additionally, the Capital Markets Report recommends that the SEC review the definition of “accredited investor” with the goal of expanding the pool of eligible investors able to invest in private placements, as well as the ways in which private offering rules may unnecessarily restrict unaccredited investors from participating in private placements.
The Capital Markets Report is available at:
Our related client publication is available at:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
