Corporate And Financial Weekly Digest - December 7, 2012
Edited by Robert L. Kohl and David A. Pentlow SEC/CORPORATE
SEC Sets Rulemaking Agenda for 2013
In its fiscal year 2012 Agency Financial Report released last week, the Securities and Exchange Commission published its rulemaking agenda for 2013 under both the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Jumpstart Our Business Startups Act (JOBS Act) as follows:
Propose and adopt rules to implement four executive compensation related provisions of the Dodd-Frank Act: new listing standards relating to specified "clawback" policies; disclosure requirements regarding performance-related executive compensation; executive pay ratios; and employee and director hedging. These mandates did not have a statutory deadline under the Dodd-Frank Act; Finalize rulemaking rules that disqualify securities offerings involving "bad actors" from relying on the safe harbor from registration provided by Rule 506 of Regulation D under the Securities Act of 1933 (the '33 Act); and Adopt rules to require many of the entities that the SEC regulates to establish programs to detect and respond to indications of identity thefts. Under the mandates contained in the JOBS Act, the 2013 agenda includes adopting rules modifying the prohibition against general solicitation and general advertising in Rules 506 and 144A under the '33 Act (the SEC proposed these rules on August 29, as reported in a September 17, 2012 Katten Client Advisory) and implementing exemptions under the '33 Act for "crowd funding" offerings as well as modifying or adopting parallel provisions to Regulation A under the '33 Act to include offerings of up to $50 million.
The SEC did not provide a time frame within 2013 for the proposal and/or adoption of the above rules.
SEC Accountants Speak at AICPA Conference
On December 3, staff of the Office of the Chief Accountant (OCA) of the Securities and Exchange Commission spoke at the 2012 National Conference of the American Institute of Certified Public Accountants (AICPA) Conference on Current SEC and Public Company Accounting Oversight Board (PCAOB) Developments. Topics discussed included the possible incorporation of International Financial Reporting Standards (IFRS) for US issuers; accounting standards convergence projects regarding revenue, leases and financial instruments; auditor independence and consultancy practices; internal control over financial reporting and the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) framework update; the auditor's reporting model; audit policy matters and various international considerations.
In particular, the OCA's Acting Chief Accountant, Paul A. Beswick, noted that incorporating IFRS into the financial reporting system for US issuers may be the single most important accounting determination for the SEC since the 1930s. A Senior Associate Chief Accountant, Jenifer Minke-Girard, discussed and summarized the SEC's findings in its Final Staff Report on the Work Plan for considering the incorporation of IFRS into the financial reporting system for US issuers, which was originally...
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