• While the basic idea behind these rules may seem straightforward, the new rules have the potential to pose a host of new challenges for public companies.
• Notably, the new rules have the potential to change how a company is seen by altering how its compensation is measured in ways that are not easy to predict.
• Companies will need to comply with the new rules in the upcoming proxy season and should begin reviewing the new requirements and analyzing how their executive compensation will be viewed under the new rules as soon as possible.

In this client alert, Bonnie J Roe breaks down the SEC’s new disclosure rules, analyzes their potential impact on public companies, and offers insight into how companies can mitigate any potential risks posed by the “pay-for-performance” rules.

Bonnie J Roe is quoted in an article by Activist Insight about whether adding activism as a risk factor in companies' annual reports is justified.

Muriel Goldberg-Darmon speaks with Caroline Ruellan, President of SONJ Conseil, about the relationship between shareholder dialogue and privileged information in an interview with Forbes.

(Regards croisés entre Caroline Ruellan, Présidente de SONJ Conseil et Muriel Goldberg-Darmon.)

In this article, Bonnie J Roe notes the impact of Reg A+ in the three years after the SEC's revised framwork rules took effect. 

Muriel Goldberg-Darmon speaks to L'Agefi regarding shareholder activism in France.

Muriel Goldberg-Darmon speaks to Décideurs Magazine regarding activist investment funds and minority shareholders.

Under revised Rule 13d-1(b)(2), an investor eligible to report on Schedule 13G must file an initial report on Schedule 13G within 45 days after the end of the first calendar quarter in which the investor becomes a beneficial owner of more than 5% of a class of equity securities registered under the Securities Exchange Act of 1934, as amended. Previously, such reports were due within 45 days of the end of the first calendar year in which beneficial ownership exceeded 5%. If an investor becomes the owner of more than 10% of a class in any month before the filing of the initial Schedule 13G, the initial Schedule 13G must be filed within 5 business days after the end of the month in which the 10% threshold was crossed.

Under the new rules, if an investor becomes the beneficial owner of more than 5% in the quarter ended September 30, 2024, the investor must report such interest by November 14, 2024. To cover the transition between the old and the new rules, if an interest in more than 5% was acquired in the first or second quarter of calendar year 2024, a Schedule 13G would also be due on November 14, 2024, reporting such interest as of September 30, 2024.

The rules regarding amendments have also changed. In general, material changes occurring during a calendar quarter must be reported within 45 days of the end of the calendar quarter. As was previously the case, a material change includes an increase or decrease in beneficial ownership amounting to at least 1% of the outstanding shares of the relevant class of securities. If an investor acquires more than 10% of a class, an amendment reporting such fact must be made within 5 business days after the end of the month in which the 10% threshold was crossed. Thereafter, increases or decreases of 5% or more must be reported within 5 business days of the end of the month in which they occur.

The new rules also require the use of structured data formatting in the EDGAR filing of Schedule 13G (as well as Schedule 13D). The structured data requirements do not go into effect until December 18, 2024, although early compliance is permitted. In addition, due to the accelerated filing deadlines, the SEC extended filing cut-off times for Schedules 13G (as well as Schedule 13D) from 5:30 pm EST to 10:00 pm EST.

In general terms, a passive investor may report on Schedule 13G, rather than the more rigorous Schedule 13D, if the investor is an institution described under Rule 13d-1(b)(1)(ii) or the investor beneficially owns less than 20% of the class of securities. Investors who acquired their shares prior to a company going public may also be eligible to report on Schedule 13G. Non-U.S. investors must report their interests on Schedule 13D or 13G in the same manner as U.S. investors.

In this C&G client alert, Bonnie Roe and Cody Lipton discuss recent statements from the SEC that highlight the importance of “good corporate hygiene” in regulating purchases and sales of stock by the company and its officers and directors, and they analyze the impact of a changing regulatory environment on the design and implementation of 10b5-1 plans.

Muriel Goldberg-Darmon discusses the difficulties facing companies in fulfilling their continued disclosure obligations to the market, as well as the resulting risks of potential AMF sanctions.

John W Gibson, Thomas Shortland, and Ashley Collins outline the key factors company directors must consider when making business decisions during the COVID-19 pandemic, as they may face scrutiny from a range of interested parties including creditors, employees, trade unions, landlords, customers, regulators, insolvency practitioners, and possibly law enforcement.

Muriel Goldberg-Darmon discusses how the outbreak of COVID-19 impacts a company’s responsibility to comply with financial communication and reporting obligations.

Muriel Goldberg-Darmon explains the specific regime of navigating whistleblowing within the French financial sector through the internal procedures of financial institutions and external procedures of the French Financial Market Authority (AMF) and the French Banking Authority (ACPR).

In this C&G Client Alert, Bonnie J Roe and Cody Lipton discuss the SEC guidance issued on January 30, 2020 on the use of key performance metrics for public companies discussing their financial results and proposed amendments to certain financial reporting requirements.

Bonnie J Roe and Cody Lipton examine the SEC's proposed amendments to its definition of “accredited investor,” which add new categories of qualifying natural persons and entities able to participate in certain exempt offerings without specific disclosures or other limitations.

Bonnie J Roe explores how Regulation A may be the best alternative for conducting an initial coin offering in her latest article for Bloomberg Law. 

Muriel Goldberg-Darmon co-authors an article examining the evolving corporate and social responsibilities of activist investors.

C&G partner Bonnie J Roe discusses the SEC’s response to the Tax Cuts and Jobs Act  and its impact on public company reporting in this C&G Alert. 

Much of modern corporate governance law turns on the roles of independent directors, but determining who is an independent director is often a complicated task, with separate state law, regulatory, and exchange standards that have evolved over time.  This article looks at key recent developments and provides a field guide for general counsel trying to understand what independence really means.

The proxy and annual reporting season is upon us and, as with other things, it is best to be prepared. Here are some thoughts for publicly traded companies to carry through the season and help plan for the remainder of the year

On December 11, 2013, the public comment period will close on two new auditing standards proposed by the Public Company Accounting Oversight Board (PCAOB) to improve the informational value of the auditor’s report. These proposed standards, if adopted, would change the role of auditors and expand the scope of the auditor’s report.

Examining the Dodd-Frank and US Foreign Corrupt Practices Acts  and ways in which companies can institute and augment compliance programs to mitigate the risks they pose.

Muriel Goldberg-Darmon est intervenue sur le thème « Activisme actionnarial et risques d’abus de marché » lors de la conférence sur les Risques de crédits & Risques de marché, Le Mans Université.

(Muriel Goldberg-Darmon gave a presentation, titled “Shareholder Activism and Market Abuse Risks,” at Le Mans University’s Credit Risks and Financial Market Risks conference).

Muriel Goldberg-Darmon a participé à la Table Ronde sur “Quelle coopération entre les mis en cause et l’AMF ?” organisée par la Commission des sanctions de l’AMF le 3 octobre 2018. La table ronde était modérée par : Jean Gaeremynck, président de section au Conseil d’Etat, membre de la Commission des sanctions de l’AMF. Les intervenants étaients : Jean-Luc Blachon, premier vice-procureur, Parquet national financier, Sophie Bresny, chef du service des investigations de l’Autorité de la concurrence Andrew Cotterell, Head of Law, Policy & International, FCA (Financial Conduct Authority), Muriel Goldberg-Darmon Associée du cabinet  Cohen & Gresser,  Benoît de Juvigny, secrétaire général de l’AMF.

(Partner Muriel Goldberg-Darmon spoke at the AMF Enforcement Committee’s annual symposium on October 3, 2018, as the only speaker from a private law firm.  Muriel was a panelist for the second round table on “Cooperation between the respondents and the AMF during investigations or inspections and sanctions,” which was moderated by Jean Gaeremynck, State Councilor and member of the AMF Enforcement Committee.  Muriel’s fellow panelists were: Jean-Luc Blachon, First Vice-Prosecutor at the Parquet National Financier; Sophie Bresny, Head of the Inspections Unit at the Autorité de la concurrence; Andrew Cotterell, Head of Law, Policy & International at the FCA (Financial Conduct Authority); and Benoît de Juvigny, Secretary General of the AMF).

Please also find a link to the September 6, 2018 issue of the magazine, La Semaine Juridique, in which a transcription of Muriel's presentation, "Fonds activistes : opportunité ou menace pour l’économie ?" is featured on page 42.

Bonnie J Roe presented at The Reg A Conference by DealFlow Events on "Will Regulation A find its niche?"

This course will examine the legal and practical foundations of good corporate governance for privately held companies, particularly younger growth companies, or start-ups, and companies backed by venture capital or private equity investors. 

This panel will discuss recent trends in compliance and enforcement, including 10b5-1 plans, hedging and pledging, and case law developments.