Proposed HALOS Act to Help Start-Up Companies Pitch Investors
A bipartisan group of lawmakers has proposed a measure that would exempt start-ups from the ban on open marketing. Introduced in the House of Representatives in February, the Helping Angels Lead our Startups (HALOS) Act seeks to amend Regulation D of the Securities Act of 1933 to ease general solicitation restrictions under specific circumstances. Per the HALOS Act, presentations would no longer be classified as general solicitation. This would give entrepreneurs the freedom to pitch investors at demo days and other events. Events backed by colleges and universities, nonprofit organizations, angel investor or venture capital groups, or other sponsors specified. Read More.
SEC Wants Feedback on PCAOB Rules for Disclosing Audit Participants
The Securities and Exchange Commission (“SEC”) has issued a Notice of Filing of Proposed Rules on Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards for public comment. Issuance of the notice is for receiving feedback on the Public Company Accounting Oversight Board’s (“PCAOB”) new rules to give investors more information regarding the participants of audits. The PCAOB’s new rules and amendments to auditing standards call for audit firms to identify the audit engagement partner and other audit firms involved in each audit. Under the. Read More.
SEC Grants Approval to FINRA Rules for Crowdfunding Portals
Per the Securities and Exchange Commission’s (“SEC”) order on January 22nd, the Financial Industry Regulatory Authority (“FINRA”) has been granted accelerated approval in regard to its rules for crowdfunding portals. Proposed in October, the FINRA’s rules outline requirements for regulated online intermediaries that bring together start-ups and potential investors. Issued in Release No. 34-76970, Notice of Amendment No. 1 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment No. 1, to Adopt the Funding Portal Rules and Related Forms and Rule 4518, the order brings the crowdfunding obligations of the JOBS Act one step closer to fruition.
Interim Rule Issued for FAST Act Disclosure Requirements
Providing guidance for the implementation of Sections 71003 and 84001 of the Fixing America’s Surface Transportation (FAST) Act, the Securities and Exchange Commission (“SEC”) has issued the Interim Final Rule, Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S-1 for Smaller Reporting Companies. Sections 71003 and 84001 of the FAST Act require the SEC to update Forms S-1 and F-1 to allow emerging growth companies to exclude financial information for certain periods, and amend Form S-1 to allow incorporation by reference for smaller companies. The interim rule will be effective upon its publication. Read More.
SEC’s 2016 Examination Priorities Announced
As part of its priorities for this year, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) plans to concentrate on existing initiatives and new areas of focus. Announced on January 11th , the OCIE’s 2016 priorities include continuing to protect investors in various risk areas like cybersecurity and fee selection. As for new focus areas, the OCIE will address matters concerning liquidity controls, public pension advisers, product promotion, exchange-traded funds and variable annuities.
Companies Advised to Use Established Internal Controls Guidance
Speaking last month on concerns regarding the reporting requirements for internal controls, Securities and Exchange Commission (“SEC”) Deputy Chief Accountant Brian Croteau recommended companies and auditors to use the agency’s existing two-part evaluation process. Per his speech at the American Institute of Certified Public Accountants’ Conference on Current SEC and Public Company Accounting Oversight Board Development, Croteau said companies should evaluate whether a material misstatement about their financial reporting controls is possible by using the interpretive guidance in Release No. 33-8810, Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporting Under Section 13(a) or 15(d) of the Securities. Read More.