The SEC’s adoption of universal proxy card rules has reshaped the process for shareholder voting in contested board elections at publicly traded companies, allowing investors to select from both management and dissident nominees on a single ballot. Notably, both companies and any dissident groups soliciting proxies for director nominees and slates are now required to provide voters with a universal proxy card that lists all candidates for election to the board in the same place, no matter who (management or dissident) is promoting the candidates.

What Is SEC Rule 144A?

SEC Rule 144A is a critical provision under the Securities Act that provides a safe harbor exemption for the resale of restricted securities to qualified institutional buyers (QIBs). Established in 1990, rule 144a was designed to enhance liquidity in the private placement market by allowing sophisticated investors to trade unregistered securities without the need for full SEC registration. This rule is particularly significant for issuers seeking to raise capital quickly and efficiently, especially in international markets.

Overview of Rules 482 and 34b-1

SEC Rules 482 and 34b-1 are among the rules that have undergone significant changes in the past few years. These two regulations affect advertising and sales literature that investment companies distribute to potential investors. The rule changes, which went into effect in January 2023, impact what investment companies can and cannot say in advertising copy about fund performance and fund complex performance, annual total return, and fee information. 

Becoming a publicly traded company with shares available on public markets takes several steps. In many cases, businesses will need to file SEC Form 10-12G before they take action to sell securities, per the Securities Act of 1933. Form 10-12G serves as an initial registration statement of the company’s private securities, turning it into a public reporting company.

Entering into a derivatives contract, such as when buying futures or making investments based on exchange rates, can be risky. The asset or currency may not perform as expected, leading the derivative to lose value. When funds invest in these securities, they must evaluate the derivatives’ risk and the potential effects on the entire fund.

Every business faces various risks. One example — and there are countless possibilities — is if a company’s payment terms are too lenient or methods for collecting payments are inefficient, it can increase the risk of default, which could lead to problems with cash flow or clientele management.

When individuals or companies file disclosures with the U.S. Securities and Exchange Commission, they must use an identifier that allows the SEC to organize their disclosures. This SEC ID is called a CIK number. The Central Index Key is a 10-digit code that applies to companies, individuals, or other entities. Organizations must know their CIK number to access public filings in the EDGAR database.

Introduction to Financial Reporting Compliance

Financial reporting compliance is essential for public companies in the United States because it safeguards transparency, investor confidence, and overall governance. Both ICFR (Internal Control over Financial Reporting) and the Sarbanes-Oxley Act (SOX) play a crucial role in this landscape. ICFR refers to the processes and procedures designed to ensure financial statements are reliable and accurate, while SOX is the federal law that requires companies to adopt and maintain these controls.

What Is SEC Form 497?

SEC Form 497 is one of the key forms for compliance officers and legal advisors within the investment fund industry, used to declare so-called definitive materials to the SEC, as required for regulatory purposes.  “Definitive materials” in this case refers to any information that is relevant to an investor’s decision about whether to invest in a fund. This includes information such as prospectuses and their supplements. Other filings (such as a quarterly report or annual report) are submitted on different SEC forms.

What is a Schedule 13D & 13G SEC Filing?

Publicly traded companies are subject to SEC requirements, such as regulations that mandate certain types of financial reporting and disclosures. One such requirement is the Schedule 13D & 13G form, which is required when an investor becomes a beneficial owner of 5% or more of a public company's stock. Disclosures such as the SEC 13D & 13G are important for transparency, as they shine a light on the investor’s intentions and their potential influence on the company’s management or strategic direction.