This was a long battle, as NIRI and its allies


have been advocating for Section 13(d) reform since 2008. The vote in favor of this Final Rule at the SEC was bipartisan, with one Republican Commissioner joining the three Democrat Com- missioners.


SEC Final Rule on Short-Sale Position Disclosures On October 13, the SEC adopted final amendments to regulate short-sale disclosures by investment managers. Like the SEC’s original proposal, the Final Rule will require investment managers with large short positions to file a Form SHO report via the Commission’s EDGAR system within 14 days after the end of each calendar month. Reporting will be required for any short position that meets or exceeds a monthly gross short position of $10 million in dollar value, or 2.5% of outstanding shares, of an equity security. Each reporting manager also will be required


to provide its “net” activity in the reported equity security, including activity in derivatives, on a daily basis within the same calendar month. These short position disclosures will be kept


confidential by the SEC. Within four weeks of the end of each calendar month, the SEC will aggregate this short position data and publish it for each security reported on Form SHO. The SEC also will publish, on an aggregated basis, the “net” activity in the reported security on a daily basis during each calendar month. NIRI was very disappointed that the SEC did


not require public disclosure of the short-sale posi- tions of individual investment managers. NIRI also argued for an alternative that would require the SEC to disclose individual manager short positions to each issuer on a confidential basis. These recom- mendations, unfortunately, were not adopted by the SEC, although NIRI will continue its advocacy to improve short-sale disclosures to individual public companies regarding their securities.


The Year Ahead Turning to the upcoming year, there are four remain- ing NIRI advocacy projects for 2024:


3 2 WINT E R 2 0 24 ■ IR UPDAT E


Public Company Advisory Committee Legislation Last summer, Rep. Frank Lucas (R-OK), a senior member of the House Financial Services Commit- tee, introduced H.R. 4652, a bill developed by NIRI to establish an advisory committee at the SEC, comprised of public company executives and their representatives. Tis bill, entitled the Public Company Advisory Committee Act of 2023, passed the House Financial Services Committee in July 2023 as part of a package of bills on SEC-related topics. Over the past decade, the SEC has created industry


advisory committees for many capital market partici- pants registered with the Commission. Institutional investors, asset managers, fixed income managers, and small growth companies all have advisory committees, enabling them—on an ongoing basis—to provide policy advice and feedback to SEC Commissioners and staff. Public companies are one of the only regulated


entities at the SEC without access to an advisory committee. And the Commission and its staff would clearly benefit from issuer input on a range of regula- tory issues.


H.R. 4652 would address this need and NIRI is


working to expand support for the bill by soliciting co-sponsorship commitments from Members of Congress who are both on and off the House Finan- cial Services Committee. Tis effort will help NIRI continue to advance this legislation in Congress.


Proxy Advisory Firm Regulation NIRI remains deeply disappointed in the 2022 Final Rule issued by the SEC that revoked key provisions in the 2020 rulemaking to regulate proxy advisory firms. Most importantly, this 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 annual and special shareholder meetings. NIRI submitted a comment letter during the rule-


making process expressing its deep disappointment that this regulation was being re-opened after a very in-depth, decades-long examination of the regulatory issues involving proxy advisory firms. The draft review process for company reports that NIRI and others in the issuer community have


niri.org/ irupdate


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