ADVOCACY OUTLOOK
and Texas. Additionally, NIRI and other associations are considering drafting and introducing legislation to urge the SEC to reopen this rulemaking and permit companies to review and comment on proxy advisory firm reports issued before shareholder meetings.
Public Company Advisory Committee Legislation Te SEC has created industry advisory committees for many capital market participants registered with the Commission. Over the years, the SEC has established these internal committees for asset managers, insti- tutional investors, fixed income market participants, and small businesses. Public companies are the only SEC registrants
without an advisory committee and the SEC would benefit from issuer input on a range of regulatory issues. To address this need, NIRI and other associa- tions are considering 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 mod- ernize the disclosure regime for 13(d) filings 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. Te SEC also proposed to include in the 5% cal-
culation any holdings of derivative products—such as cash-settled equity swaps—where the derivative instrument is being held with the purpose or effect of changing or influencing control of an issuer. Tese derivative products have been used by hedge funds and other activists for many years to hide their economic interest in large blocks of public company shares. For more than a decade, NIRI has advocated for
shorter 13(d) reporting deadlines and for addressing the use of swap and other derivative products to hide beneficial ownership. On April 15, NIRI submitted a comment letter in strong support of this proposal by the SEC to modernize its Section 13 beneficial ownership rules. NIRI members attending the Legislative and Leadership Fly-In last September in Washington
2 6 WI N T E R 2 0 2 3 ■ IR UPDAT E
also had the opportunity to discuss this rulemaking with members of the SEC staff. According to the latest version of the SEC Regula-
tory Agenda, 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 February 2022 to provide greater transparency of short sale positions. Tis proposal was mandated by Section 929X of the Dodd-Frank Act. Te SEC proposal would require monthly reporting
by investment managers of large short-sale positions that meet certain thresholds. Tese filings would be kept confidential by the Commission. Te agency would then—on a monthly basis—publish aggregated short position information regarding each issuer. In its comment letter to the SEC, NIRI expressed
its disappointment that short-sale position informa- tion would not be made available for each investment manager holding a large short position. While pub- lishing aggregated information monthly improves market transparency, NIRI members have long sought monthly reporting and disclosure by each investment manager holding a large position. As an alternative to the SEC proposal, NIRI has
ni ri .org/ irupdate
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40
