Archives: Capital Markets

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Linking Stock Buybacks and Insider Sales: An SEC Commissioner’s Concerned Perspective

New SEC Commissioner Robert J. Jackson Jr. (sworn in last January) delivered an interesting speech last week at the Center for American Progress highlighting an apparent connection between corporate stock buybacks and insider stock sales – and calling for remedial regulatory and governance action. Commissioner Jackson said that his long-standing interest in stock buybacks was … Continue Reading

Virtual Coins are ‘Securities’ After All

On July 25, the SEC issued a Rule 21(a) investigative report concluding that the sun rises in the east and sets in the west. No, wait, that’s not right. The report actually concluded that tokens offered by an unincorporated “virtual organization” known as The DAO (presumably short for “decentralized autonomous organization”) in what is known … Continue Reading

Brexit’s Impact on the U.S. Capital Markets

You may have heard by now that the U.K. plans to leave the European Union at some point in the next few years. Since the British voted back on June 23, 2016, there has been no shortage of learned analysis/rank speculation about Brexit’s future impact on the U.K. and EU economies and financial markets. Opinions … Continue Reading

T+2 is a Reality

Last September, the SEC proposed rules that would shorten the standard settlement period for securities transactions from three business days (T+3) to two business days (T+2). As predicted, the rules have now been finalized in short order and without controversy. Background This is the latest, though probably not the last, step in the evolution of … Continue Reading

T+2 is on the Way (Finally)

At long last, the SEC has proposed amendments to its rules that would shorten the standard settlement period for securities transactions from three business days (T+3) to two business days (T+2). The proposal… The change would be accomplished by amending Exchange Act Rule 15c6-1 to prohibit a broker-dealer from entering into a contract for the … Continue Reading

Tandy Reps are No More

The SEC announced on October 5th that, effective immediately, “Tandy” representations are no longer required in company responses to SEC comment letters. Practically speaking, this requires only a simple template modification to a company’s letter responding to SEC comments. For those of us who have been around for a while, it also means the end … Continue Reading

Limits on 401(k) Plan Brokerage Windows

Many companies have recently modified their 401(k) plans to add a “brokerage window,” sometimes also known as a “self-directed account” or “self-directed brokerage account.” Rather than limiting participants to specified investment options (which may or may not include the employer’s own stock), plans with brokerage windows offer participants the ability to trade most of the … Continue Reading

IEX: The New Slower-is-Better Securities Exchange

In case you missed it, Investors’ Exchange LLC (IEX), which the SEC approved last June as the first new national stock exchange since 2010, began operations on September 2, 2016 according to its website. This is newsworthy because IEX is the first national securities exchange to employ a “speed bump” that actually slows the processing … Continue Reading

New SEC Guidance for Rule 144A/Exxon Capital Debt Exchanges

For decades companies have privately issued nonconvertible debt securities to large, sophisticated investors (usually in a Rule 144A transaction) and agreed to exchange those unregistered securities for subsequently issued, substantially identical debt securities registered within an agreed timeframe on Form S-4. This process allows infrequent issuers to access the debt markets quickly without first navigating … Continue Reading

International Reporting Tightens at NYSE as Competition from Europe Heats Up

Two recent events highlight the ever-shifting dynamic between U.S. and international capital markets. The first, a technical NYSE rule affecting the reporting obligations of foreign private issuers, was subtle. The second, the proposed merger of two iconic European stock exchanges, could be dramatic. NYSE’s new rule… In Release No. 34-77198, the SEC approved, effective immediately, … Continue Reading

Recent DGCL Amendments of Note

The Delaware General Assembly recently amended Delaware’s corporate statutes in several respects of interest to public companies. Boards may delegate stock issuances to non-directors. Section 152 of the DGCL now expressly allows a board of directors to generally authorize future stock issuances and then delegate to non-directors the authority to determine the specific issuance times … Continue Reading

What is Crowdfunding Anyway?

Rarely has a capital markets concept been more ambiguous, and potentially more confusing, than crowdfunding. It seems that everyone has his or her own definition, which sometimes varies depending on the circumstances. Now a recent Federal Trade Commission order, as well as widespread fascination with start-ups of all shapes and sizes, has generated another round … Continue Reading

Liability for Statements of Opinion–New Clarity from the Supreme Court

The U.S. Supreme Court’s recent decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund resolved a clear split in the federal courts of appeal regarding when statements of opinion may give rise to liability under the securities laws. In a victory for public companies and their officers and directors, the Court held, … Continue Reading

Expediting Debt Tender and Exchange Offers

In late January, the SEC’s Division of Corporation Finance issued a no-action letter that significantly expedites non-investment grade debt security tender and exchange offers and eases certain other restrictions. With so many companies now refinancing debt to access favorable interest rates and extend maturities, this is welcome news. The No-Action Letter… The letter was submitted … Continue Reading

More SEC Social Media Guidance–Don't Be Left Behind

The SEC’s incremental accommodation of social media continues. Most recently, the staff has issued several CDIs specific to public offering communications, including tombstone ads (Rule 134), business combinations (Rule 165) and free writing prospectuses (Rule 433(c)). While this may be gripping stuff for the relatively few companies that like to communicate offering-related information via Twitter … Continue Reading

The JOBS Act

By now, you all know that President Obama signed the Jumpstart Our Business Startups (JOBS) Act on April 5th. A rare example of political bi-partisanship, the Act is intended to help smaller companies raise capital to fund growth and create jobs.… Continue Reading
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