CURRENT MONTH (December 2021)

Securities Regulation

SEC Proposes Amendments Regarding Rule 10b5-1 Insider Trading Plans and Related Disclosures

By Bella Zaslavsky, K&L Gates LLP

On December 15, 2021, the Securities and Exchange Commission announced its proposal to amend Rule 10b5-1. The announcement follows SEC Chair Gary Gensler’s June 2021 direction to the SEC Staff to propose recommended reforms to the rule, and largely track the recommendations made by the Investor Advisory Committee in September 2021. The proposed amendments are intended to enhance disclosure requirements and investor protections against insider trading.

Under Section 10(b) of Rule 10b-5 of the Securities Exchange Act of 1934, it is illegal to purchase or sell a security on the basis of material nonpublic information (MNPI). Rule 10b5‑1(c) provides an affirmative defense against insider trading to companies and insiders transacting in company securities. The proposed amendments include the following updates to Rule 10b5-1(c):

  • Cooling-off period. 10b5-1 trading arrangements entered into by insiders would include a 120-day cooling off period, while trading arrangements entered into by issuers would include a 30-day cooling-off period. Modifications would be treated as a termination of an existing arrangement and adoption of a new plan.
  • Prohibition against overlapping trading plans. Insiders would no longer be able to enter into multiple plans at any one time, or have overlapping plans, trading in the same class of securities.
  • Limitations on single-trade plans. Any single-trade plans would be limited to one trade plan per twelve-month period.

Insiders would also be required to provide issuers with written certifications at the time a plan is adopted certifying that the insider is not aware of any MNPI about the issuer and that the plan is being adopted in good faith.

The amendments also include mandatory disclosure obligations for issuers and insiders. Under the proposed amendments, issuers would be required to disclose policies and procedures related to insider trading (or if the issuer has not adopted such policies or procedures, an explanation as to why not), the practice around timing of option grants and release of MNPI, additional disclosure around options granted within 14 days of release of MNPI, and quarterly disclosure about the adoption and termination of Rule 10b5-1 trading arrangements by insiders. Insiders filing Section 16 reports would also be required to check a new box on Forms 4 and 5 indicating whether the reported transactions are made pursuant to a Rule 10b5-1(c) or other trading plan, and gifts would now need to be disclosed on a Form 4.

Issuers are advised to start reviewing their insider trading policies and considering procedures that may need to be adopted or revised in light of the proposed amendments.

The proposed amendments will be subject to public comments for a forty five-day period following publication in the Federal Register.

SEC Proposes Amendments to Modernize Share Repurchase Disclosures

By Melissa Sanders, Fox Rothschild LLP

On December 15, 2021, the SEC proposed amendments to the disclosure requirements applicable to share repurchases. Currently, issuers who repurchase shares must report those repurchases on a quarterly basis. Under the proposed amendments, quarterly disclosure requirements would remain in place (with additional disclosures required in those reports), and issuers would also be required to report certain information using a new Form SR within one business day of each repurchase.

Notably, under the proposed rules, an issuer would be required to disclose its “objective or rationale” for the buyback, as well as details related to “the process or criteria used to determine the repurchase amounts.” In its report on the proposed amendments, the SEC noted that share repurchases have increased in recent years and that some commentators have expressed concern about the impact of these repurchases. The SEC stated that the rules would address certain “information asymmetries” between investors and the companies engaging in repurchases and would benefit investors by “improving the quality, relevance and timeliness” of disclosures.

SEC Announcements Related to No-Action Requests

By Madeline Moore, Charles River Laboratories

On December 13, 2021, the Securities and Exchange Commission (SEC) announced that it will once again respond to each shareholder proposal no-action request with a written letter. This is a return to the SEC’s prior practice, which had been discontinued in 2019 when the SEC initiated a process whereby it responded to no-action requests with a written letter only in limited instances and instead communicated the majority of its responses through a chart maintained on the SEC’s website. The return to written responses comes after the SEC reconsidered its policy and concluded that written responses provide greater transparency and certainty to shareholder proponents and companies. While responses will no longer be issued via a chart, the SEC will make response letters publicly accessible on its website and still intends to publish a chart of responses at the conclusion of the proxy season.

In relation to its publishing of Rule 14a-8 submissions and related materials, the SEC noted that it frequently receives personally identifiable and other sensitive information about shareholder proponents, companies, and other parties that is not relevant to its consideration of no-action requests (such as brokerage account numbers, physical addresses, email addresses, and individual telephone numbers). In an effort to avoid the delays that the redaction process causes in making materials publicly available on its website, the SEC issued an announcement stating that, beginning on December 17, 2021, companies and shareholder proponents should (i) only submit information and documents to the SEC that are relevant to the SEC’s consideration of the no-action request; and (ii) redact all personally identifiable and other sensitive information from Rule 14a-8 submissions and related materials prior to submission to the SEC.

The SEC noted that it may require parties to resubmit any materials submitted that contain personally identifiable or sensitive information and that the SEC will not consider the substance of those materials until they are resubmitted.

SEC Staff Issues Statement on LIBOR Transition

By Bradley Berman, Mayer Brown

On December 7, 2021, the Securities and Exchange Commission staff (Staff) released a statement (Statement) to remind investment professionals of their obligations when recommending LIBOR-linked securities and to remind companies and issuers of asset-backed securities of their disclosure obligations related to the LIBOR transition.

The Statement covers several areas of concern to the SEC, summarized below:

  • Recommendations by broker-dealers of LIBOR securities or investment strategies involving LIBOR securities to retail customers;
  • Disclosure obligations of issuers with material exposure to LIBOR securities;
  • The effect on retail customers of a recommendation of LIBOR securities with no fallback provisions; and
  • The effect on retail customers of a recommendation of LIBOR securities with fallback provisions, and the resulting change in the interest rate from USD LIBOR to the secured overnight financing rate (SOFR).[1]

Broker-dealers. The Staff stated that broker-dealers should be “especially mindful of their obligations when recommending LIBOR-linked securities or investment strategies involving LIBOR-linked securities to retail customers.” Under Regulation Best Interest, a broker-dealer recommending LIBOR securities or investment strategies involving such securities must have a reasonable basis to believe that the recommendation is in the best interest of the retail customer.[2] The care obligation of Regulation Best Interest requires that a broker-dealer must exercise reasonable diligence, care and skill to understand the potential risks, rewards and costs associated with the recommendation, and in light of the retail customer’s investment profile, that the recommendation is in the best interests of the particular retail customer.[3] Accordingly, a broker-dealer must understand whether there are robust fallback provisions providing for a clear replacement rate after USD LIBOR is no longer available, and the effect of the replacement rate on the LIBOR security.

The Staff also stated that it would be difficult for a broker-dealer to recommend a LIBOR security with no fallback provision, absent the recommendation being premised on a specific, identified, short-term trading objective.

Legacy USD LIBOR securities with no fallback provisions would, without any external action, become fixed-rate notes after June 30, 2023, when most USD LIBOR tenors will no longer be published. The Staff’s concern is the effect of this change in the interest rate, which would be material, on a retail investor. Most outstanding USD LIBOR securities with fallback provisions will switch over to SOFR, and the Staff is concerned that, even with adequate fallback provisions and because SOFR is not a perfect match for USD LIBOR, the effect on the LIBOR securities’ interest payments may be material to a retail investor.

Although the Statement makes reference to Article 18-C of the New York General Obligations Law, which will cause any legacy USD LIBOR New York law governed securities without adequate fallbacks to switch over to SOFR after June 30, 2023, the Statement treats recommendations of these legacy USD LIBOR securities differently than recommendations of USD LIBOR securities with robust fallback provisions.[4] Also, at this point, any legacy USD LIBOR securities without adequate fallback provisions would be available only in the secondary market.

The Staff’s concern with legacy LIBOR securities without fallback provisions would be applicable to non-USD LIBOR securities, such as a GBP LIBOR floating rate note (FRN) governed by New York or other U.S. state law. These types of FRNs will not be affected by the New York or federal legislation. However, these types of FRNs are a small slice of the market. USD LIBOR-preferred stock, which is generally governed by Delaware law, will be addressed by the upcoming federal LIBOR legislation.

Broker-dealers who agree to monitor a retail customer’s account were also reminded of their obligations under Regulation Best Interest, in that the broker-dealer must reassess the potential risks, rewards and costs of any LIBOR securities in a retail customer’s account at each time of the agreed-upon review, based on the current state of the LIBOR transition and the potential effect on a customer’s LIBOR security holdings. The broker-dealer’s recommendation at the time of each monitoring may be to buy, sell or hold, and if the broker-dealer remains silent, that is an implicit hold recommendation.

Issuers. Issuers must keep investors informed of their progress toward LIBOR risk identification and mitigation, and the anticipated effect on the issuer, if material. This disclosure could be included in the risk factors, management’s discussion and analysis, board risk oversight and the financial statements sections of the prospectus. Issuers with material risk related to outstanding LIBOR debt with inadequate fallback provisions should consider how much debt will be outstanding after the LIBOR cessation date and the steps the company is taking to address the situation. As discussed above, this would seem to apply only to non-USD LIBOR securities or preferred stock, the latter of which will be solved by the upcoming federal LIBOR legislation. Issuers with material outstanding non-USD LIBOR securities may have to disclose upcoming plans for tender or exchange offers, or consent solicitations.

The Statement also notes that the recommendations of the Alternative Reference Rates Committee on fallback language for new issuances of USD LIBOR FRNs are not binding on U.S. issuers, in that issuers are not obligated to include any particular fallback language in such securities.

SEC Division of Corporation Finance Issues Sample Letter to China-Based Companies

By Gonzalo Go and James Alford, Mayer Brown

On December 20, 2021, the Securities and Exchange Commission’s Division of Corporation Finance (Division) issued the Sample Letter (Letter) to companies based or having the majority of their operations in the People’s Republic of China (China-based Companies). The Letter requires China-based Companies to disclose in their public filings “more prominent, specific and tailored” risks associated with investing in these companies in compliance with their disclosure obligations under the federal securities laws and to enable investors to make informed investment decisions.

In the Letter, the Division provided a sample comment letter to a China-based Company identifying the types of disclosures that should be addressed, including the relevant risks and the potential impacts on such company’s operations. These issues include, (i) the corporate structure of the China-based Company, (ii) the relationship between the entity conducting the offering and the entities conducting the operating activities, (iii) the operations conducted by subsidiaries and through contractual arrangements with a variable interest entity (VIE) based in China, (iv) potential impact if VIE structure were disallowed or the contracts were determined to be unenforceable, (v) the potential impact of the Holding Foreign Companies Accountable Act and related rules in the listing and trading of its securities, (vi) permission or approval required to be obtained from Chinese authorities to operate its business or offer securities to foreign investors, (vii) how cash is transferred within the organization and (viii) the Chinese government’s significant oversight and discretion over the conduct of the company’s business.

For SPACs, the Division requires them to also disclose (i) if their sponsor/s or executive office/s are in China or have significant ties with China, (ii) if contemplating to merge with a company incorporated in China, (iii) what challenges SPAC investors might face in enforcing their rights under the SPAC’s controlling agreements with the VIE, (iv) any impact Chinese laws or regulations may have on the SPAC’s ability to consummate a business combination with an operating company in China and (v) the cash flows associated with the business combination.

A copy of the Letter may be viewed here.

PCAOB and SEC Move Forward with Implementation of Holding Foreign Companies Accountable Act

By Thomas W. White, Retired Partner, WilmerHale

Implementation of the Holding Foreign Companies Accountable Act (HFCAA) by US securities regulators is proceeding apace. As anticipated, mainland China and Hong Kong have been identified as jurisdictions that do not provide adequate access to the Public Company Accounting Oversight Board’s (PCAOB) inspection and investigative functions. As a result, foreign issuers that are audited by accounting firms based in China or Hong Kong face a US trading prohibition if these issues continue for three consecutive years beginning in 2022.

The HFCAA, which was enacted in December 2020, requires the Securities and Exchange Commission to prohibit trading in companies that are audited by foreign public accounting firms that the PCAOB has determined it is unable to inspect or investigate completely due to a position taken by a foreign jurisdiction (“Commission-Identified Issuers”) for three consecutive years.

On December 2, 2021, the SEC issued final rule amendments to implement the HFCAA. The SEC had previously adopted some of these rules as interim rules in March 2021. The final amendments cover the following:

  • Specifying the process by which the SEC will identify a registrant as a Commission-Identified Issuer;
  • Establishing the process by which the SEC will prohibit trading of a company that the SEC has conclusively identified as a Commission-Identified Issuer for three consecutive years and for lifting the prohibition if the PCAOB subsequently determines that it is able to inspect or investigate completely the company’s auditor;
  • Requiring Commission-Identified Issuers to submit documentation on or before their annual report due dates establishing that it is not owned or controlled by a governmental entity in its public accounting firm’s foreign jurisdiction; and
  • Requiring a Commission-Identified issuer that is also a “foreign issuer” as defined in Exchange Act rule 3b-4 to provide certain additional specified disclosures in its annual report with respect to itself and consolidated foreign operating entities, including any consolidated variable-interest entities.

The SEC’s identification of “Commission-Identified Issuers” is predicated on the PCAOB identifying foreign registered public accounting firms that the PCAOB is unable to inspect or investigate completely due to a position taken by a foreign jurisdiction. As previously reported, in September the PCAOB adopted a final rule governing the determinations it is required to make under the HFCAA. The SEC approved the PCAOB rules in November. Pursuant to these rules, on December 16, the PCAOB issued a report setting forth its determinations that it is unable to inspect or investigate completely PCAOB-registered pubic accounting firms in mainland China and Hong Kong. The PCAOB identified registered firms based in China or Hong Kong that are covered by the determinations.

The SEC will begin identifying Commission-Identified Issuers after they file their 2021 annual reports in 2022. The earliest the trading prohibitions would apply would be in 2024, when the issuer would have been a Commission-Identified Issuer for the three consecutive years—2022, 2023 and 2024.

ISS and Glass Lewis Issue 2022 Updates to Proxy Voting Guidelines

By Lori Zyskowski, Elizabeth A. Ising and Ronald O. Mueller, Gibson Dunn

Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis), the two major proxy advisory firms, recently released updates to their proxy voting policies for the 2022 proxy season. The ISS U.S. policy updates are available here. The ISS updates will apply for shareholder meetings on or after February 1, 2022, except for those policies subject to a transition period. ISS plans to release an updated Frequently Asked Questions document that will include more information about its policy changes in the coming weeks.[5]

The Glass Lewis updates are included in its 2022 U.S. Policy Guidelines and the 2022 ESG Initiatives Policy Guidelines, which cover shareholder proposals. Both documents are available here. The Glass Lewis 2022 voting guidelines will apply for shareholder meetings held on or after January 1, 2022.

This alert reviews the ISS and Glass Lewis updates. Both firms have announced policy updates on the topics of board diversity, multi-class stock structures, and climate-related management and shareholder proposals. Glass Lewis also issued several policy updates that focus on nominating/governance committee chairs, as well as new policies specific to special purpose acquisition companies (SPACs).

A. Board Diversity

  • ISS – Racial/Ethnic Diversity. At S&P 1500 and Russell 3000 companies, beginning in 2022, ISS will generally recommend “against” or “withhold” votes for the chair of the nominating/governance committee (or other directors, on a case-by-case basis) if the board “has no apparent racially or ethnically diverse members.” This policy was announced last year, with a one-year transition. There is an exception for companies where there was at least one racially or ethnically diverse director at the prior annual meeting and the board makes a firm commitment to appoint at least one such director within a year.
  • ISS – Gender Diversity. ISS announced that, beginning in 2023, it will expand its policy on gender diversity, which since 2020 has applied to S&P 1500 and Russell 3000 companies, to all other companies. Under this policy, ISS generally recommends “against” or “withhold” votes for the chair of the nominating/governance committee (or other directors, on a case-by-case basis) where there are no women on the board. The policy includes an exception analogous to the one in the voting policy on racial/ethnic diversity. 
  • Glass Lewis – Gender Diversity. Beginning in 2022, Glass Lewis will generally recommend “against” or “withhold” votes for the chair of the nominating/governance committee at Russell 3000 companies that do not have at least two gender diverse directors (as announced in connection with its 2021 policy updates), or the entire committee if there is no gender diversity on the board. In 2023, Glass Lewis will move to a percentage-based approach and issue negative voting recommendations for the nominating/governance committee chair if the board is not at least 30% gender diverse. Glass Lewis is using the term “gender diverse” in order to include individuals who are non-binary. Glass Lewis also updated its policies to reflect that it will recommend in accordance with mandatory board composition requirements in applicable state laws, whether they relate to gender or other forms of diversity. It will not issue negative voting recommendations for directors where applicable state laws do not mandate board composition requirements, are non-binding, or only impose reporting requirements.
  • Glass Lewis – Diversity Disclosures. With respect to disclosure about director diversity and skills, for 2021, Glass Lewis had announced that it would begin tracking companies’ diversity disclosures in four categories: (1) the percentage of racial/ethnic diversity represented on the board; (2) whether the board’s definition of diversity explicitly includes gender and/or race/ethnicity; (3) whether the board has a policy requiring women and other diverse individuals to be part of the director candidate pool; and (4) board skills disclosure. For S&P 500 companies, beginning in 2022, Glass Lewis may recommend “against” or “withhold” votes for the chair of the nominating/governance committee if a company fails to provide any disclosure in each of these four categories. Beginning in 2023, it will generally oppose election of the committee chair at S&P 500 companies that have not provided any aggregate or individual disclosure about the racial/ethnic demographics of the board.

B. Companies with Multi-Class Stock or Other Unequal Voting Rights

  • ISS. ISS announced that, after a one-year transition period, in 2023, it will begin issuing adverse voting recommendations with respect to directors at all U.S. companies with unequal voting rights. Stock with “unequal voting rights” includes multi-class stock structures, as well as less common practices such as maintaining classes of stock that are not entitled to vote on the same ballot items or nominees, and loyalty shares (stock with time-phased voting rights). ISS’s policy since 2015 has been to recommend “against” or “withhold” votes for directors of newly public companies that have multiple classes of stock with unequal voting rights or certain other “poor” governance provisions that are not subject to a reasonable sunset, including classified boards and supermajority voting requirements to amend the governing documents. Companies that were publicly traded before the 2015 policy change, however, were grandfathered and so were not subject to this policy. ISS had sought public comment about whether, in connection with the potential expansion of this policy to all U.S. companies, the policy should apply to all or only some nominees. The final policy does not specify, saying that the adverse voting recommendations may apply to “directors individually, committee members, or the entire board” (except new nominees, who will be evaluated case-by-case). For 2022, the current policy would continue to apply to newly public companies. ISS tweaked the policy language to reflect that a “newly added reasonable sunset” would prevent negative voting recommendations in subsequent years. ISS considers a sunset period reasonable if it is no more than seven years.
  • Glass Lewis. Beginning in 2022, Glass Lewis will recommend “against” or “withhold” votes for the chair of the nominating/governance committee at companies that have multi-class share structures with unequal voting rights if they are not subject to a “reasonable” sunset (generally seven years or less).

C. Climate-Related Proposals and Board Accountability at “High-Impact” Companies

  • ISS – Say on Climate. In 2021, both shareholders and management submitted Say on Climate proposals. For 2022, ISS is adopting voting policies that document the frameworks it has developed for analyzing these proposals, as supplemented by feedback from ISS’s 2021 policy development process. Under the new policies, ISS will recommend votes case-by-case on both management and shareholder proposals, taking into consideration a list of factors set forth in each policy. For management proposals asking shareholders to approve a company’s climate transition action plan, ISS will focus on “the completeness and rigor of the plan,” including the extent to which a company’s climate-related disclosures align with Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations and other market standards, disclosure of the company’s operational and supply chain greenhouse gas (“GHG”) emissions (Scopes 1, 2 and 3), and whether the company has made a commitment to be “net zero” for operational and supply chain emissions (Scopes 1, 2 and 3) by 2050. For shareholder proposals requesting Say on Climate votes or other climate-related actions (such as a report outlining a company’s GHG emissions levels and reduction targets), ISS will recommend votes case-by-case taking into account information such as the completeness and rigor of a company’s climate-related disclosures and the company’s actual GHG emissions performance.
  • ISS – Board Accountability on Climate at High-Impact Companies. ISS also adopted a new policy applicable to companies that are “significant GHG emitters” through their operations or value chain. For 2022, these are companies that Climate Action 100+ has identified as disproportionately responsible for GHG emissions. During 2022, ISS will generally recommend “against” or “withhold” votes for the responsible committee chair in cases where ISS determines a company is not taking minimum steps needed to understand, assess and mitigate climate change risks to the company and the larger economy. Expectations about the minimum steps that are sufficient “will increase over time.” For 2022, minimum steps are detailed disclosure of climate-related risks (such as according to the TCFD framework) and “appropriate GHG emissions reduction targets,” which ISS considers “any well-defined GHG reduction targets.” Targets for Scope 3 emissions are not required for 2022, but targets should cover at least a significant portion of the company’s direct emissions. For 2022, ISS plans to provide additional data in its voting analyses on all Climate Action 100+ companies to assist its clients in making voting decisions and in their engagement efforts. As a result of this new policy, companies on the Climate Action 100+ list should be aware that the policy requires both disclosure in accordance with a recognized framework and quantitative GHG reduction targets, and that ISS plans to address its new climate policies in its updated FAQs, so there may be more specifics about this policy when the FAQs are released.
  • Glass Lewis – Say on Climate. Glass Lewis also added a policy on Say on Climate proposals for 2022, but it takes a different approach from ISS. Glass Lewis supports robust disclosure about companies’ climate change strategies. However, it has concerns with Say on Climate votes because it views the setting of long-term strategy (which it believes includes climate strategy) as the province of the board and believes shareholders may not have the information necessary to make fully informed voting decisions in this area. In evaluating management proposals asking shareholders to approve a company’s climate transition plans, Glass Lewis will evaluate the “governance of the Say on Climate vote” (the board’s role in setting strategy in light of the Say on Climate vote, how the board intends to interpret the results of the vote, and the company’s engagement efforts with shareholders) and the quality of the plan on a case-by-case basis. Glass Lewis expects companies to clearly identify their climate plans “in a distinct and easily understandable document,” which it believes should align with the TCFD framework. Glass Lewis will generally oppose shareholder proposals seeking to approve climate transition plans or to adopt a Say on Climate vote, but will take into account the request in the proposal and company-specific factors.

ISS and Glass Lewis issued other updates of note. For a full copy of our report, please review our full alert dated December 13, 2021.

Other SEC Developments re: Money Market Rules and Security-Based Swaps

By Rani Doyle, EY*

In addition to the above, the SEC undertook other actions in December, including (1) proposing amendments to money market rules under the Investment Company Act of 1940 (MMA Proposal) and (2) proposing new rules to (i) prevent fraud, manipulation and deception in connection with security-based swaps, (ii) prevent undue influence over the chief compliance officer (CCO) of security-based swap dealers and major security-based swap participants (SBS Entities), and (iii) require any person with a large security-based swap position to publicly report certain information related to the position.

In its fact sheet issued with the MMA proposal, the SEC stated that the proposed amendments would improve the resilience and transparency of money market funds by:

  • Increasing minimum liquidity requirements to provide a more substantial buffer in the event of rapid redemptions;
  • Removing the ability of money market funds to impose liquidity fees and redemption gates when they fall below certain liquidity thresholds, which would eliminate an incentive for preemptive redemptions;
  • Requiring certain money market funds to implement swing pricing so that redeeming investors bear the liquidity costs of their redemptions; and
  • Enhancing certain reporting requirements to improve the SEC’s ability to monitor and analyze money market fund data.

The summary section of the proposed rules re: security-based swaps states that the SEC is:

  • Proposing a new rule designed to prevent fraud, manipulation, and deception in connection with effecting transactions in, or inducing or attempting to induce the purchase or sale of, any security-based swap. The rule is designed specifically to take into account the unique features of a security-based swap and would explicitly reach misconduct in connection with the ongoing payments and deliveries that typically occur throughout the life of a security-based swap.
  • Proposing a new rule that would make it unlawful for any officer, director, supervised person, or employee of a security-based swap dealer or major security-based swap participant, or any person acting under such person’s direction, to directly or indirectly take any action to coerce, manipulate, mislead, or fraudulently influence the security-based swap dealer’s or major security-based swap participant’s CCO in the performance of their duties under the federal securities laws or the rules and regulations thereunder.
  • Using its authority under the Exchange Act to propose for comment a new rule, which would require any person with a security-based swap position that exceeds a certain threshold to promptly file with the SEC a schedule disclosing certain information related to its security-based swap position.

The SEC issued a fact sheet along with this proposal.

[1] The focus of this article is on USD LIBOR floating rate notes and preferred stock, related recommendations by broker-dealers and related disclosures by issuers. The Statement also covers municipal securities underwriting by broker-dealers and the obligations of registered investment advisers and funds.

[2] See Rule 15l-1(a)(2)(i) under the Securities Exchange Act of 1934.

[3] See Rule 14l-1(a)(2)(ii)(B) under the Securities Exchange Act of 1934.

[4] The Statement makes no reference to the federal USD LIBOR legislation.

[5] ISS also issued an updated set of FAQs on COVID-related compensation decisions.


Rani Doyle

Rani Doyle

Managing Editor, Securities Law

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