The SEC Pulse

SEC amends Rule 701 and solicits comments on ways to modernize offerings pursuant to compensatory arrangements

Posted by Howard Berkenblit on July 18, 2018 at 1:52 PM

The SEC today issued final rules to amend Securities Act Rule 701, which provides an exemption from registration for securities issued by private companies pursuant to compensatory arrangements, such as equity plans. As mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act, the amendment increases from $5 million to $10 million the aggregate sales price or amount of securities sold during any consecutive 12-month period in excess of which a company is required to deliver additional disclosures to investors/grantees. This will allow private companies to make more grants without having to meet more extensive disclosure requirements.

In addition, the SEC approved a "concept release" soliciting comment on possible ways to modernize rules related to compensatory arrangements in light of the significant evolution in both the types of compensatory offerings and the composition of the workforce since the SEC last substantively amended these rules in 1999. The SEC is soliciting comment on possible ways to update the requirements of Rule 701 and Form S-8 (which provides a simplified registration form for companies to use to issue securities pursuant to employee equity plans). Among other things, the concept release solicits comment on:

  • "Gig economy" relationships, in light of issuers using internet platforms to provide workers the opportunity to sell goods and services, to better understand how they work and determine what attributes of these relationships potentially may provide a basis for extending eligibility for the Rule 701 exemption;
  • Whether the SEC should further revise the disclosure content and timing requirements of Rule 701(e); and
  • Whether the use of Form S-8 to register the offering of securities pursuant to employee benefit plans should be further streamlined.

The amendment to Rule 701 to increase the threshold will be immediately effective. The Concept Release is merely soliciting comments, and further action by the SEC will depend on many factors, including comments received and competing items on its regulatory agenda.

Topics: Securities Act, Rule 701, Concept Release

SEC registration fees to decrease on October 1st

Posted by Howard Berkenblit on August 31, 2015 at 5:02 PM

As of October 1st, the SEC filing fee rate for Securities Act registration statements will decrease from $116.20 per million to $100.70 per million.

The SEC’s announcement of the change can be found here.

Topics: registration statements, Securities Act

SEC no-review letters to be publicly available

Posted by Howard Berkenblit on June 15, 2015 at 4:47 PM

The staff of the SEC’s Division of Corporation Finance has made an announcement that it will begin releasing through the EDGAR system correspondence with issuers relating to Securities Act registration statements that are not selected for review.

Topics: Division of Corporation Finance, EDGAR, Securities Act

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The SEC Pulse provides updates and commentary from our Capital Markets Group on issues affecting publicly traded and privately owned businesses, investment banks and foreign companies who trade or raise capital in the United States, and boards of directors and company officers in securities transactions and corporate governance matters. 

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