Securities Regulation and Corporate Governance


SEC Stays Effectiveness of New Buyback Disclosure Rule; Fifth Circuit Denies SEC's Request for Additional Time to Correct Rules

​On November 22, 2023, the SEC announced that it had issued an order indefinitely postponing the effectiveness of the Share Repurchase Disclosure Modernization rule (the “Repurchase Rule"), pending further SEC action. At the same time, the SEC asked the Fifth Circuit for additional time to respond to the court's order that the SEC correct deficiencies in the Repurchase Rule by November 30. The court denied that motion on November 26. As a result, the SEC has until November 30 to correct the deficiencies the court had found with the SEC's rulemaking, after which we expect the court will consider a renewed motion from the petitioners to vacate the Repurchase Rule.

The Repurchase Rule, discussed in our Client Alert, requires companies to: (i) disclose daily company share repurchase data in a new table filed as an exhibit to reports on Form 10-Q and Form 10-K, (ii) provide narrative disclosure in those filings about the company's share repurchase program, including its objectives and rationale, and referencing the particular repurchases that correspond to that narrative, (iii) indicate by a check box whether any executives or directors traded in the company's equity securities within four business days before or after the public announcement of the repurchase plan or program or the announcement of an increase of an existing share repurchase plan or program, and (iv) provide quarterly disclosure regarding the company's adoption or termination of any Rule 10b5-1 trading arrangements. The Repurchase Rule was scheduled to go into effect beginning with the Form 10-K or Form 10-Q filed for the first full fiscal quarter beginning on or after October 1, 2023, meaning that for calendar year-end companies, these disclosure requirements would have applied to the 2023 Form 10-K. While the Repurchase Rule is stayed, the pre-existing share repurchase disclosure rules, requiring information on share repurchase programs and quarterly repurchase disclosures presented on an aggregated, monthly basis, remain in effect.  

 As noted above, the SEC's action staying effectiveness of the Repurchase Rule occurred in connection with a motion filed by the SEC in the lawsuit brought by the U.S. Chamber of Commerce and several other business groups in the Fifth Circuit challenging the Re...

Division of Corporation Finance Offers New Guidance on Application of the SEC’s Universal Proxy Rules Ahead of the 2024 Proxy Season

As discussed in our previous client alert, the universal proxy rules that went effective on August 31, 2022 require proxy cards distributed by both public companies and nominating shareholders in contested director elections to include both sides' director nominees, such that shareholders casting their vote can “mix-and-match" nominees from each of the company's and the dissident's slate of director nominees.

On August 25, 2022, the staff (the “Staff") of the Division of Corporation Finance of the Securities and Exchange Commission issued three Compliance and Disclosure Interpretations (“C&DIs") focused on the mechanics associated with practical implementation of these new rules.  More details on those three C&DIs can be found in our previous blog post.

On November 17, 2023, the Staff provided new guidance on the treatment of over-voted, under-voted and unmarked universal proxy cards in director election contests (see C&DI Proxy Rules and Schedules 14A/14C, Question 139.07, Question 139.08 and Question 139.10).  Specifically, these new C&DIs address the following issues:

1. Votes on an over-voted proxy card will not count for any seats in an election contest.

Rule 14a-19(e) requires that each soliciting party in a non-exempt director election contest include all director nominees of all soliciting parties on each universal proxy card.  As a result, in a contested election, each soliciting party's universal proxy card will include more nominees than director seats up for election.  An “over-voted proxy card" occurs when a shareholder returns a proxy card in a director election contest but exercises a vote “for" the election of more nominees than the number of director seats up for election. For example, voting for 10 nominees when there are only 9 seats up for election is an “over-vote."

Under Question 139.07, the Staff clarifies that (i) any votes on an over-voted proxy card will not count for any seats in a director election and (ii) a soliciting party cannot rely on discretionary authority pursuant to Rule 14a-4(b)(1) to v...

SEC Launches New Online Portal For Shareholder Proposal No-Action Requests

​On November 6, 2023, the Securities and Exchange Commission's Division of Corporation Finance launched a new online portal through which companies must submit all future Rule 14a-8 shareholder proposal no-action requests (“NARs"). The portal must also be used by shareholder proponents or their representatives and by companies to submit any responsive or supplemental correspondence relating to a Rule 14a-8 NAR. The new portal replaces the prior process, which the Division initiated in 2008, of submitting NARs and supplemental correspondence by email to [email protected]. We understand that the email address will continue to be monitored, but should not be used for any correspondence that is intended to be considered in connection with a Rule 14a-8 NAR.  

The portal is accessible at The portal includes a web form that requires a submitting party to provide the following information: (i) whether the request is an initial request or supplemental correspondence; (ii) the identity of the submitting party (i.e. “company" or “proponent"); (iii) the submitting party's contact information, and if submitted by a company, the option to provide the proponent's contact information; (iv) the company's anticipated proxy print date; (v) the text of the proposal's “resolved clause"; and (vi) the Rule 14a‑8 bases for exclusion asserted, using a checkbox interface. The portal then allows a submitting party to upload relevant documents, such as a traditional NAR letter, in PDF, DOC, or DOCX format.  The portal calls for different information when supplemental information is being submitted. 

Importantly, the portal does not transmit the submitted documents to any counterparty. Instead, the submitting party must check a box to attest that it has sent the correspondence to any relevant counterparties by email and/or mail.

Going forward, any company wishing to submit either an NAR or provide supplemental correspondence should ensure that the submission is made via the online portal in order to be considered properly submitted.


Thank you to Spencer Bankhead (bar admission pending) in our Orange County office for his help on this update.

SEC Exempts Rule 144A Debt Issuances From Rule 15c2-11 Information Requirements

On October 30, 2023, the Securities and Exchange Commission (the “Commission") issued an Order exempting brokers and dealers from the requirements of Rule 15c2-11(g) (the “Rule") under the Securities Exchange Act of 1934, as amended, with respect to fixed-income securities that are sold in compliance with the safe harbor in Rule 144A (the “Rule 144A") under the Securities Act of 1933, as amended, for resales to Qualified Institutional Buyers (“QIBs").  As a result, issuers of Rule 144A fixed-income securities will not have to publish public information in order for brokers to quote their securities and facilitate trading.


As discussed in more detail in our prior Client Alert from November 21, 2022, the Rule, first adopted in 1971, while not directly applicable to issuers, requires US broker-dealers to collect and review certain issuer information before publishing quotes on the issuer's securities in the Over the Counter market.  The Rule was never applied to fixed-income securities, and industry practice was to comply with the Rule only with respect to equity securities.

In September 2020, the Commission announced the adoption of amendments to the Rule, requiring that specified issuer information be current and publicly available in order for US broker-dealers to publish quotes on that issuer's securities.  In September 2021, the Division of Trading and Markets surprised all Rule 144A market participants when it issued a no-action letter stating that the amended Rule applies to all securities, including fixed income securities, but providing additional time to comply to allow for an orderly and good faith transition.  The Division subsequently issued two additional no-action letters to ultimately delay the effect of the amended Rule until January 4, 2025, as discussed in further detail in our prior Client Alert from December 1, 2022.

Under the interpretation underlying those no-action letters, issuers of fixed-income securities would be required to publicly disclose specified current financial and other information in order to allow U.S. broker-dealers to publish quotations on...

SEC Rolls Out Enforcement Sweep Against Delinquent Filers Ahead of Recent 13D/G Amendments

Late last month, shortly before adopting amendments to Regulation 13D/G, the Securities and Exchange Commission (“SEC") announced civil charges against several officers, directors, and major shareholders of public companies for failing to satisfy their timely reporting obligations. The SEC also charged the affiliated public companies for contributing to the reporting failures by insiders.

This latest Enforcement sweep included charges against six individuals, all of whom failed to timely file Form 4s within two business days of the execution date.  The six individuals missed their reporting deadlines on more than 10 transactions, in many instances by several months, and in some instances by more than a year.   

Two individuals were charged with failing to timely file Schedule 13D or Schedule 13G beneficial ownership reports.  In each of these instances, the individuals failed to timely amend their reports when their beneficial ownership changed by a material amount.  In one instance, the individual failed to timely file an initial Schedule 13G within the 10-calendar day filing deadline.

In addition, the SEC charged five public companies with contributing to the failures of their respective insiders.  In each of the “cease-and-desist" orders, the SEC observed:  “Although the Commission has encouraged the practice of many issuers to 'help their [officers and directors] to submit the [] filings on their behalf . . . [in order] to facilitate accurate and timely filing,' Section 16 places the responsibility to report changes in securities ownership on insiders." 

The SEC went on to warn: “issuers who voluntarily accept certain responsibilities and then act negligently in the performance of those tasks may be liable as a cause of Section 16(a) violations by insiders."   The six individuals and five companies charged in this sweep incurred aggregate monetary penalties of $1.57 million, with an average penalty in excess of $142,000.

Clearly the SEC has stepped up its enforcement game against recidivist late filers and those companies that have undertaken to assist their insiders in meeting their reporting obligations.  The actions represent a firm response to habitually late filers, demonstrating the Commission's determination to reinforce the importance of timely and complete filings by Section 13(d) and Section 16 reporting persons.

As noted earlier, the SEC recently adopted changes to modernize the reporting requirements by accelerating filing deadlines.  Under the newly a...

UPDATE: California Governor Signs Climate Legislation Into Law, But Signals Changes To Come

​On October 7, 2023, California Governor Gavin Newsom signed into law Senate Bill 253, the Climate Corporate Data Accountability Act (“SB 253") and Senate Bill 261, Greenhouse Gases: Climate-Related Financial Risk (“SB 261"). The legislation imposes extensive new climate-related reporting requirements on any public or private U.S. business entity with annual revenues over $1 billion and $500 million (for SB 253 and SB 261, respectively) doing business in the state. A detailed discussion of each bill is available in our recent client alert.

With his signatures, the Governor issued brief statements on SB 253 and SB 261 expressing his concern about the bills' “overall financial impact" on businesses and his view that the implementation deadlines are not feasible. He also noted that The Greenhouse Gas Protocol—the reporting standard for greenhouse gas emissions under SB 253—“could result in inconsistent reporting across businesses." The Governor indicated he would direct his “Administration to work with the bill's author and the Legislature next year [(i.e., 2024)] to address" these matters, but did not provide details as to how long the reporting requirements, which begin as early as 2025 for climate-related risks reports under SB 261, could be delayed. We will monitor for further updates as they as arise.

We would like to thank Lauren Assaf-Holmes in our Orange County office for her work on this post.

Updated Summary of Director Education Opportunities Available

Gibson Dunn's summary of director education opportunities has been updated as of October 2023. A copy is available at this link. Boards of Directors of public and private companies find this a useful resource as they look for high quality education opportunities.  

This quarter's update includes a number of new opportunities as well as updates to the programs offered by organizations that have been included in our prior updates. Some of the opportunities include unique events for members of private boards.

​Thank you to associates Mason Gauch and To Nhu Huynh from our Houston office for their assistance with this quarter's update.

SEC Desktop Calendar 2024 - Now Available

​To continue assisting US companies with planning for SEC reporting and capital markets transactions into 2024, we offer our annual SEC Desktop Calendar. This calendar provides both the filing deadlines for key SEC reports and the dates on which financial statements in prospectuses and proxy statements must be updated before use (a/k/a financial staleness deadlines).

You can download a PDF of Gibson Dunn's SEC Desktop Calendar for 2024 at the link below.

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Preparing for a Potential Government Shutdown: Initial Impacts on SEC Operations

A looming partial shutdown of the federal government is on track to occur at 12:01 a.m. ET on Sunday, October 1, 2023, if Congress is unable to reach agreement on legislation funding the government. The SEC Division of Corporation Finance (the “Division") announced that in the event of a government shutdown, the SEC's “activities will be extremely limited" and specifically, that it would not be able to accelerate the effectiveness of registration statements. The Division advised that, to the extent possible, registrants with pending registration or offering statements that have satisfied the requirements to request acceleration of the effective date should consider requesting effectiveness or qualification while the Division continues its normal operations. The Division provided a Q&A with its announcement addressing potential impacts before, during and after a potential shutdown. On September 29, the Division posted an additional announcement with contact information for addressing fee calculations and emergency filing relief during a shutdown.

Regardless of the SEC's operating status, the EDGAR filing system will continue to accept reports, registration statements, offering statements, preliminary and definitive proxy statements, insider ownership and transaction reports, and other filings. Accordingly, public companies must continue to file periodic and current reports when due on Forms 10-K, 10-Q and 8-K (for the purposes of rules involving day counting, the days for which the government is shut down—other than Saturday, Sunday or a federal holiday—will continue to count as “business days").

Additionally, the Q&A notes that in the event of a shutdown, the Division will not be able to review or respond to shareholder proposal no-action letters but will return to reviewing no-action requests when the SEC's operations resume. Registrants should continue to timely submit those letters under Rule 14a-8(j). Likewise, the Q&A notes that the Division will not be able to review preliminary proxy statements, which must continue to be filed at least 10 calendar days prior to the date definitive materials are first sent to shareholders. The Division may review previously filed proxy sta...

EDGAR Next: SEC Proposes Changes to EDGAR Filer Access and Account Management Procedures

​Following a request for comment on the topic in 2021, on September 13, 2023, the Securities and Exchange Commission (“SEC") proposed amendments to Rules 10 and 11 of Regulation S-T and Form ID regarding potential technical changes to Electronic Data Gathering, Analysis, and Retrieval System (“EDGAR") filer access and account management (referred to by the SEC as “EDGAR Next"). 

EDGAR Next is intended to “enhance EDGAR's security and further improve filers' access to the EDGAR system" said SEC Chair Gary Gensler in a statement (available here).  The Proposing Release (available here) indicates that the changes should “facilitate the responsible management of filer credentials, and simplify procedures for accessing EDGAR."  EDGAR Next would require filers to authorize designated account administrators to manage the filers' accounts and make filings on the filers' behalf and would require these account administrators and any other authorized users to have their own individual account credentials to access EDGAR Next.  As described below, the Form ID application process and ongoing flings will require slightly more coordination between a filer and individuals it has authorized to file on its behalf, the new application process will require additional information (e.g., history of securities law violations) when filing a Form ID, and new annual confirmations and other security measures might be burdensome for certain filers.  All considered, the additional security and flexibility these changes will provide will likely outweigh these inconveniences.

Individual Account Credentials Would Replace Filer Password, PMAC, and Passphrase

Currently, each filer, whether a company or individual, has a central index key (“CIK") and only one login, consisting of one password along with a passphrase used during the Form ID application and CIK confirmation code (“CCC") and password modification authorization code (“PMAC") that are each generated after a filer is granted access to EDGAR.  EDGAR allows any individual in possession of a filer's password and CCC to access the filer's EDGAR account and make filings.  EDGAR Next would continue to use the CCC, but retire the EDGAR password, PMAC, and passphrase.  Instead, account administrators and authorized users would need to login with their own individual credentials and would have access to the CCC on the filer's dashboard.  The CIK would continue to be used and the CCC would still be required for filing.  The updated access protocols thus provide additional security and traceability by limiting access to a filer's account to only those individuals...

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