Form N-PORT Submission Deadline Delayed
In a press release issued on Wednesday, February 27, the Securities and Exchange Commission (“SEC”) announced that the deadline for registered investment companies to submit non-public Form N-PORT has been extended from 30 days to 60 days following the end of a fiscal quarter. Changing the filing date of Form N-PORT, a form used to disclose public and non-public fund portfolio holdings in a structured data format, helps align the SEC’s approach to data management and cybersecurity. The change will also allow the SEC to execute its mission while lowering its cyber risk profile. More on the Form N-PORT deadline change is available in. Read More.
AICPA Board to Align Materiality with U.S. Standard-Setters
At a meeting in January, the American Institute of Certified Public Accountants’ (“AICPA”) Auditing Standards Board (“ASB”) agreed to align its “materiality” definition with the definitions used by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), and Public Company Accounting Oversight Board (“PCAOB”). The narrow project aims to remove inconsistencies in the definition among AICPA Professional Standards and the Supreme Court, SEC, FASB, and the PCAOB. The effort comes after the FASB’s decision last year to revert to its original “materiality” definition from 1980 to 2010. The FASB revised its definition to align its concept of materiality to determine what information should be included and omitted from a. Read More.
SEC Commissioner Condemns Registration Requirements for Private Funds
At a recent event hosted by the Bipartisan Policy Center, the Securities and Exchange Commission’s (“SEC”) Hester Peirce expressed criticism about the registration provisions for private funds. The SEC commissioner said such funds are not a systemic risk to the financial system, but they are often viewed as banks. Rather than rely on the Dodd-Frank Act-mandated requirements, she wants to do away with the provisions altogether. While preferring that there is no mandatory registration of private fund managers, Peirce is open to curtailing the requirements. She highlighted the difficulty in determining where the systemic risk comes from in this part. Read More.
PCAOB to Clarify Hiring of Hearing Officers
The Public Company Accounting Oversight Board (“PCAOB”) has proposed amendments to affirm that its hiring practices for hearing officers for auditor disciplinary proceedings are subject to approval by the Securities and Exchange Commission (“SEC”). Announced last week, the proposed changes come after last summer’s Supreme Court ruling in Lucia vs. SEC that the agency’s process for hiring administrative law judges was unconstitutional. The Supreme Court stated that under the Appointments Clause of the U.S. Constitution, administrative law judges are inferior officers and must be appointed by the president, a court of law, or a department head (e.g, the SEC). The. Read More.
Corp Fin Issues Interpretive Guidance on Board Diversity Disclosures
The Securities and Exchange Commission’s Division of Corporation Finance (“Corp Fin”) has issued new interpretive guidance to clarify company disclosures on board diversity. Presented in a question-and-answer format, the new guidance adds an item to the Compliance and Disclosure Interpretations (“C&DIs”): Regulation S-K concerning Subpart 400 of Regulation S-K, which covers information separate from what companies must disclose in financial statements. Subpart 400 concerns details associated with corporate governance matters such as executive pay and board director qualifications. Question 116.11 of the C&DIs inquires what aspects regarding a board member with respect to diversity must be disclosed under Item 401.. Read More.
Companies Fined for Failing to Remediate Internal Control Problems
Four public companies have settled with the Securities and Exchange Commission (“SEC”) after being charged with failing to resolve their internal control reporting failures. The SEC said the companies disclosed material weaknesses in internal control over financial reporting (“ICFR”) for seven to ten straight annual reporting periods. Such weaknesses involved certain high-risk areas of the companies’ financial statement presentation. Grupo Simec, a Mexican iron and steel manufacturer, disclosed material weaknesses in its filings from 2008 to 2017. However, in 2015 and 2016, company management did not test its controls. The SEC alleged Grupo Simec failed develop a control structure and. Read More.