SEC Final Rules

SEC adopts amendments to modernize Rule 10b5-1 insider trading plans and related disclosures

On December 14, the SEC adopted amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 and new disclosure requirements “to enhance investor protections against insider trading.” The amendments include updates to Rule 10b5-1(c)(1) and Rule 10b-5.

Compliance Dates:

• Section 16 reporting persons will be required to comply with the amendments to Forms 4 and 5 for beneficial ownership reports filed on or after April 1, 2023.
• Issuers will be required to comply with the new disclosure requirements in Exchange Act periodic reports on Forms 10-Q, 10-K, and 20-F and in any proxy or information statements in the first filing that covers the first full fiscal period that begins on or after April 1, 2023.
• The final amendments defer by six months the date of compliance with the additional disclosure requirements for smaller reporting companies.

Read the press release and final rule adopting release..

SEC Proposed Rules

SEC proposes Regulation Best Execution

On December 14, the SEC proposed Regulation Best Execution, which would establish a best execution regulatory framework for brokers, dealers, government securities brokers, government securities dealers and municipal securities dealers.

• Comments Due: March 31, 2023, or 60 days after publication in the Federal Register, whichever is later.
• Read the press release and proposed rule.

SEC proposes rule to enhance competition for individual investor order execution

On December 14, the SEC proposed a rule that would require certain orders of individual investors “to be exposed to competition in fair and open auctions before such orders could be executed internally by any trading center that restricts order-by-order competition.”

• Comments Due: March 31, 2023, or 60 days after publication in the Federal Register, whichever is later.
• Read the press release and proposed rule.

SEC proposes rules to amend minimum pricing increments and access fee caps and to enhance the transparency of better priced orders

On December 14, the SEC proposed to amend certain rules under Regulation NMS to adopt variable minimum pricing increments, or “tick sizes,” for the quoting and trading of NMS stocks, reduce access fee caps for protected quotations, and accelerate the transparency of the best priced orders available in the market.

• Comments Due: March 31, 2023, or 60 days after publication in the Federal Register, whichever is later.
• Read the press release and proposed rule.

SEC proposes amendments to enhance disclosure of order execution information

On December 14, the SEC proposed amendments that would update the disclosure required under Rule 605 of Regulation NMS for order executions in national market system stocks (stocks listed on a national securities exchange).

• Comments Due: March 31, 2023, or 60 days after publication in the Federal Register, whichever is later.
• Read the press release and proposed rule.

SEC reopens comment period for proposed rule on share repurchase disclosure modernization

On December 7, the SEC reopened the comment period on proposed amendments intended to modernize and improve the disclosure required about an issuer’s repurchases of its equity securities, often referred to as buybacks. The comment was reopened for the public to comment on the impact of The Inflation Reduction Act of 2022.

• Comments Due: January 11, 2023.
• Read the press release and proposed rule..

SEC Other Actions

The SEC Investor Advisory Committee (IAC)–December meeting

On December 8, the IAC discussed investor account statements, corporate tax transparency and single-stock ETFs.

Read the agenda and recorded webcasts.

SEC no-action letter - amended Rule 15c2-11 in relation to fixed income securities

On November 30, the SEC issued a no-action letter (and withdrew their prior no-action letter on the same subject) regarding publication or submission requirements of broker or dealer for fixed income transactions.

Read the SEC letter.

SEC publishes FY22-26 Strategic Plan

On November 23, the SEC released its Strategic Plan outlining agency objectives for fiscal years 2022 to 2026. This includes: “Modernize design, delivery, and content of disclosures so investors, including in particular retail investors, can access consistent, comparable, and material information to make informed investment decisions.”

Read the press release.

SEC announces enforcement results for FY22

On November 15, the SEC announced it filed 760 total enforcement actions in fiscal year 2022, a nine percent increase over the prior year.

Read the press release and statistics. .

Retirement

Secure 2.0 – Congress passes new retirement rules

On December 29, as part of the omnibus spending bill, SECURE 2.0 was signed into law. The significant retirement legislation includes many provisions that are designed to increase retirement savings for working families. A few highlights include:

• Increasing the age for required minimum distributions (RMDs) to 73 in 2023 (and to 75 in 2033).
• Decreasing the penalty for failing to take an RMD from 50% to 25% of the RMD amount (and 10% if corrected in a timely manner for IRAs).
• Increasing catch-up contributions for 401(k), 403(b), governmental plans and IRA account holders (in 2025).
• Part-time employees are eligible for 401(k)s sooner.
• Allowing employer-sponsored matches for student loan debt repayments.
• New emergency savings accounts can be offered if a DC retirement plan is associated with a Roth account (matches are allowed).

DOL announces final rule to remove barriers to considering environmental, social, governance factors in plan investments

On November 22, the DOL announced its final rule on “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”

• Compliance Date: The rule will be effective 60 days after its publication in the Federal Register except for a delayed applicability until one year after publication for certain proxy voting provisions.
• Read the press release.

DOL seeks public comments on proposed improvements to Voluntary Fiduciary Correction Program for employers

On November 18, the DOL announced its Employee Benefits Security Administration has proposed updates to its Voluntary Fiduciary Correction Program.

• Comments Due: January 20, 2023.
• Read the press release..

Digital Assets

SEC issues crypto disclosure guidance – sample letter to companies

On December 8, the SEC’s Division of Corporation Finance issued guidance to public companies about the disclosure of exposure to digital assets. The SEC provided a sample comment letter to companies regarding recent crypto developments: “In meeting their disclosure obligations, companies should consider the need to address crypto asset market developments in their filings generally, including in their business descriptions, risk factors, and management’s discussion and analysis.” 

View the guidance and sample letter.

SEC charges Samuel Bankman-Fried with defrauding investors in crypto asset trading platform FTX

On December 13, the SEC charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and co-founder.

Read the press release.

House Financial Services Committee Chairwoman Waters, Ranking Member McHenry announce December hearing to investigate FTX collapse

On December 13, House Financial Services Committee Chairwoman Waters and Ranking Member McHenry held a hearing to investigate the FTX Collapse.

Review the video of the hearing.

SEC Commissioner views on digital assets

Although the SEC has not issued specific rules for crypto assets, SEC Commissioners have provided their views through public statements and speeches about the applicability (or lack thereof) of the existing securities law framework. We’ve included a curated list of links to recent statements:

Read Commissioner Jaime Lizárraga’s speech.

Read Chairman Gary Gensler’s September 15 Senate Banking Committee testimony.

Read Chairman Gary Gensler’s September 8 speech.

Read Commissioner Hester Peirce’s June 14 speech.

_{This newsletter is not intended as legal advice. Broadridge recommends you contact your legal counsel for a complete understanding of the information contained in this publication.}