The Advisors' Blog

Corp Fin Director Erik Gerding and Chief Counsel Michael P. Seaman joined the “Dialogue with the SEC Senior Staff” session on Friday at the ABA’s Business Law Section Spring Meeting. Reminding us that Corp Fin’s hard work doesn’t end with the rule adoption, Erik noted that once a rule is effective, lots of work goes into implementation – training folks in the disclosure review program, working through the comment process and deciding how to provide guidance. Erik then outlined the Staff’s plan for the review program for PVP disclosures, which the SEC is considering in two buckets:

– For issuers that omitted the disclosures – either entirely or in part – comments will be issued asking about the missing pieces. Take note: Erik called out that the Staff may ask those issuers to delay an annual meeting until the required disclosures are made! 

– For issuers that provided the required disclosures, the Staff may issue comments at the end of proxy season that are prospective in nature, recognizing the complexity of the rules and the number of interpretive questions. The Staff may also consider providing more broadly applicable guidance.

Erik notes that the Staff doesn’t see the first season as establishing a settled practice and reserves the right, going forward, to make further comments as to how the rule should be interpreted. Liz previously blogged about commentary from the Staff earlier this year that the PVP comment process will be iterative and the Staff isn’t looking to be punitive for companies who presumably put in a good-faith effort to comply with the requirements, so that certainly seems consistent.

– Meredith Ervine