SPOTLIGHT ON ADVOCACY
NIRI Advocates on Six Key Issues
BY NIELS HOLCH T
he 118th Congress is up and run- ning. Here is a quick rundown on three legislative initiatives NIRI is pursuing in 2023 and an update on three pending SEC rulemakings of interest to NIRI members.
Section 13(f) Modernization Legislation In 2023, NIRI staff will continue working to pass a 13(f) modernization bill similar to H.R. 4618, the bill advanced in the last Congress by U.S. House of Representatives Financial Services Committee Chair Maxine Waters (D-CA). This bill authorized the SEC to move
from quarterly disclosures to monthly dis- closures of equity holdings by institutional investment managers and shorten the filing deadline from 45 days to a more reasonable requirement.
Proxy Advisory Firm Legislation
The SEC issued a final rule in July 2022 to roll back a portion of the regulation it adopted in 2020 to regulate proxy advisory firms. Tis new SEC rule eliminated the requirement that proxy advisory firms allow public companies to review and comment on the written reports issued by these firms before shareholder meetings. NIRI submitted a comment letter during the rulemaking process.
niri.org/ irupdate Litigation to challenge this 2022 final
rule has been initiated by the U.S. Chamber of Commerce and the National Association of Manufacturers in Tennessee and Texas. Additionally, U.S. Representative Bryan Steil (R-WI) has introduced H.R 448 to require the SEC to adopt new rules to regulate proxy advisory firms under the Securities Exchange Act.
Public Company Advisory Committee Legislation Public companies are the only SEC regis- trants without an advisory committee and the SEC would benefit from issuer input on a range of regulatory issues. NIRI is advancing legislation to require the agency to establish a Public Company Advisory Committee.
SEC Proposed Rule to Modernize Section 13(d) In February 2022, the SEC proposed a rule to modernize the disclosure regime for 13(d) fil- ings required when an investor accumulates 5% of an issuer’s shares outstanding. Tis proposal would shorten the time required to file from 10 days to five business days. NIRI submitted a comment letter in strong support of this proposal and a Final Rule is expected in the second quarter of 2023.
SEC Proposed Rule on Short Sale Position Disclosure Te SEC released a rule proposal in Febru-
ary 2022 to provide greater transparency of short sale positions. Te SEC’s proposal would require monthly reporting by invest- ment managers of large short-sale positions that meet certain thresholds. Tese filings would be kept confidential by the Com- mission. The agency would then—on a monthly basis—publish aggregated short position information regarding each issuer. As an alternative to the SEC proposal,
NIRI recommended in a comment letter to the SEC that manager-level informa- tion be made available to each issuer on a confidential basis once certain thresholds have been reached. A Final Rule is expected in the second quarter of 2023.
SEC Proposed Rule on Climate Change Disclosures In March 2022, the SEC released a rule proposal to mandate certain climate-re- lated disclosures by public companies. In its comment letter on this rulemaking, NIRI expressed concern about the overly pre- scriptive nature of this proposed rule and urged the SEC to employ a more flexible, principles-based approach to regulation in this area. A Final Rule is expected in the second quarter of 2023. IR
Niels Holch is Vice President, Public Policy and Advocacy at NIRI; nholch@
holcherickson.com
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