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SEC Doubles Private Company Reporting Exemption for Stock Offerings

In an amended rule issued on July 18, the Securities and Exchange Commission (“SEC”) expanded its reporting exemption for stock compensation distributed by private entities. Published as Release No. 33-10520, Rule 701 — Exempt Offerings Pursuant to Compensatory Arrangements, the amendment increases the threshold from $5 million to $10 million for stock offerings excluded from the SEC’s reporting requirements. Only private companies and foreign companies already exempt from the agency’s reporting rules are eligible for the exemption. SEC chairman Jay Clayton said the reporting threshold was raised to keep pace with the country’s rapidly evolving economy. Clayton also noted that. Read More.

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SEC Eyes Strategic Plan through 2022

Seeking public comments, the Securities and Exchange Commission (“SEC”) has issued a draft strategic plan that will drive the agency’s top objectives through FY 2022. The proposed plan highlights the agency’s commitment to helping the long-term interests of Main Street investors. Other top priorities include an increased focus on innovation and resiliency to market trends and using staff expertise, data and analytics to improve performance. Feedback on the draft strategic plan is due to the SEC within 30 days from its publication in the Federal Register. The news release regarding the draft strategic plan is available on SEC.gov.

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New SEC Rule Issued for Inline XBRL

The Securities and Exchange Commission (“SEC”) has adopted a final rule that amends its requirements for using the eXtensible Business Reporting Language (“XBRL”) in regulatory filings. According to the final rule, companies that use XBRL must embed the interactive data instructions directly into their regulatory filing’s financial statements while being prepared. For shareholder reports, mutual funds must use inline XBRL when preparing risk/return summaries. The rule change is likely to speed up the time necessary to prepare a financial statement in XBRL and manage the appearance of footnote disclosures in an interactive data format. In addition, the rule is expected. Read More.

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SEC Corp Fin Director Speaks on Applying Securities Laws to Digital Assets

Speaking at the Yahoo Finance All Markets Summit last month in San Francisco, CA, Securities and Exchange Commission (“SEC”) Division of Corporation Finance (“Corp Fin”) director William Hinman discussed how federal securities laws are applied to digital assets. Hinman argued that securities laws apply to digital asset transactions considering that funds are raised under the assumption that promoters will develop their system and that investors expect a return on the instrument. He also noted several factors to consider when determining whether a digital asset is a security. One factor involves considering whether a third party pushes the expectation of a. Read More.

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SEC Deputy Chief Accountant Discusses Impact of Tax Reform

Earlier this month at the 37th annual Securities and Exchange Commission (“SEC”) and Financial Reporting Institute Conference, SEC deputy chief accountant Sagar Teotia spoke on the financial reporting impact of the Tax Cuts and Jobs Act. In particular, Teotia shared his observations on Staff Accounting Bulletin (“SAB”) No. 118, which was issued in January to help public companies and auditors adjust to the tax changes . He noted that SAB No. 118 does not offer companies an option to defer the application of the income tax guidance and splits the accounting for the income tax effects caused by the Act into three “buckets”. Teotia also cautioned that the disclosure guidance under SAB No. 118 offers financial statement users vital information concerning how. Read More.

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SEC Proposes Rolling Back the Volcker Rule

Weeks after President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act , a bill to roll back systemic risk regulations under the Dodd-Frank Act, the Securities and Exchange Commission (“SEC”) is taking aim at reversing another Dodd-Frank rule. In a 3-2 vote on June 5, the SEC issued a proposal to amend the Dodd-Frank Act’s Volcker Rule, which limits banks’ proprietary trading and prohibits them from owning hedge funds and private equity funds. The proposal would create new requirements centered on a bank’s trading activities, with an aim to alleviate the burden small- and mid-sized companies face in complying with the Volcker rule. It would also revise the exemptions. Read More.

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