ON Securities

After all the speculation about effective dates of the new amendments to the proxy disclosure rules, the SEC on Tuesday published a set of Compliance & Disclosure Interpretations that clarifies the effective date of the new amendments . . . . The most important clarification is that companies with a fiscal year ended before December 20, 2009 will not have to comply with the new rules this year. A company with a fiscal year ended on or after December 20, 2009 will be required to comply, unless the definitive proxy materials and the Form 10-K are filed before February 28, 2010. . . . You might review this previous post that includes insights from a recent Deloitte program on compliance with the new rules . . . . [to read more, click on the link above]

The ON Securities Cheat Sheet has now been updated to provide a summary of the SEC’s proxy disclosure amendments at the top of the second page. . . .[to read more, click on the link above]

On December 16, 2009, the SEC adopted its amendments to the proxy disclosure rules – see the press release and the full 129-page release that includes the text of the rules. The release has led to some confusion about when the new rules are effective – the release mentions an effective date of February 28, 2010, but it does not specify exactly what that means. I agree with Mark Borges in the Proxy Disclosure Blog (subscription site), who assumes that the amendments apply to proxy statements and other applicable filings on or after that date. . . . In my last post, I mentioned one of the “sleepers” in the rules. But I think there may be another one. . . . [to read more, click on the link above]

As many of you know, the SEC announced yesterday that it will hold an open meeting on Wednesday, December 16 for the purpose of adopting its proposed amendments to the proxy disclosure rules. . . . The two questions on everyone’s mind: When will the rules be effective? And what changes will the SEC make to the proposals? . . . . Assuming the final rules are similar to the proposals, many public companies will be busy over the next few weeks preparing for the new disclosures. . . . . There are some “sleepers” too . . . .[to read more, click on the link above]

As I reported previously, the SEC enforcement staff is “loaded for bear,” stepping up its enforcement activities to go after violations of the securities laws. Some recent stories reinforce that it is more important than ever to guard against these violations . . . . The Wall Street Journal reported on Wednesday that the SEC has greatly expanded its insider trading investigations of broker-dealers and hedge funds . . . . There is no reason to think that the current investigations are limited to broker-dealers and hedge funds, and the trail could easily lead the SEC staff to company personnel. . . . [to read more, click on the link above]

I’ve just finished three and a half very interesting days at the NASPP Annual Conference and the Proxy Disclosure Conference sponsored by CompensationStandards.com in San Francisco. Aside from an unexpectedly big crowd and some great food, attendees encountered some interesting updates. . . . Shelley Parratt, Director of Corporation Finance of the SEC, addressed the group, and there were two main news items. First, she previewed the currently proposed amendments to the proxy disclosure rules. She didn’t address when the amendments would be considered, but stated that the new rules “may well” be in place for the 2010 proxy season . . . . Second, apart from the new rules, Parratt discussed compliance with the proxy disclosure rules adopted in 2007 and indicated that the SEC staff will take a more assertive (aggressive?) posture in its comment process. . . .[to read more, click on the link above]

Early November finds us in a kind of limbo – those of us who advise public companies on governance and compensation matters are waiting for something big to happen. But there’s plenty of smaller stuff to report on – although most of these items present more questions than answers . . . . On November 4, SEC Chairman gave a speech addressing current regulatory developments. She described the proxy disclosure rules but did not address when they would be adopted or considered. . . . Rep. Maxine Waters has proposed an amendment to the Investor Protection Act of 2009 . . . . [to read more, click on the link above]

Last week, the Twin Cities Chapter of the National Association of Stock Plan Professionals hosted a presentation on hot topics in executive compensation . . . . One of the hot topics covered by the presenters was compensation risk analysis. They presented a very high-level summary of steps a company should consider . . . . As I discussed previously, if the SEC adopts its proposed amendments to the proxy rules, each public company will be required to disclose in its proxy statement how its overall compensation policies for employees (including compensation of non-executives) create incentives that can affect the company’s risk level, and its management of risk. . . . Public companies should start thinking about the analysis that must be completed . . . . [to read more, click on the link above]

The news today was filled with reports on the first anniversary of the collapse of Lehman Brothers. . . . At around the same time, our local chapter of the National Association of Stock Plan Professionals (NASPP) produced a webcast/conference call entitled “Troubled Company, Workout and Bankruptcy Issues: A little ‘gloom and doom’ with your morning java.”. . . Just to keep on sharing the “gloom and doom”, we have made the transcript available – it makes interesting reading. Topics included . . . SEC Enforcement Follow-Up . . . . On Monday, as described in this New York Times article, Federal District Judge Jed Rakoff issued a scathing order (see the link in the Times article) that voided Bank of America’s $33 million settlement with the SEC. . . . [to read more, click on the title above]

The past few weeks have been fairly slow in terms of new developments in securities law, corporate governance and executive compensation. However, summer’s over, and I’m expecting a flurry in the next few weeks. Take a look back at the ON Securities Cheat Sheet – a lot of these developments are likely to change as we head into the fall . . . . Last weekend I saw my all-time favorite film about blogging – okay, maybe the only film I have seen about blogging. “Julie & Julia” follows two parallel true stories . . . . I watched Julie’s story with my “blogger hat” on, and I tried to figure out what made her blog successful. . . .[to read more, click on the title above].