Capital Markets & Securities Law Watch

The Texas Governor signed a bill that raises the bar for shareholder proposals for Texas corporations. The new law, signed by Governor Abbott on May 19, 2025, has major implications for shareholders of certain Texas corporations and is part of a larger effort to make Texas more business-friendly.

On April 30, 2025, the Financial Services Committee of the U.S. House of Representatives voted to advance a draft bill that would abolish the Public Company Accounting Oversight Board (PCAOB) and shift its oversight duties to the SEC. 

On April 1, 2025, the SEC approved the launch of the Green Impact Exchange (the GIX), which will be the first sustainability-focused stock exchange in the United States. Trading on the GIX is expected to begin in early 2026. The exchange aims to provide a marketplace for environmentally responsible companies and attract investors committed to advancing environmental sustainability.

On April 11, 2025, the SEC’s Division of Corporation Finance issued six new Compliance and Disclosure Interpretations (C&DIs) regarding (i) clawback-related checkboxes on the cover page of Form 10-K and (ii) disclosure required by Regulation S-K Item 402(w)(2). These C&DIs provide crucial guidance for listed issuers on reporting corrections of errors in financial statements and analyzing the implications for executive compensation recovery.

The SEC staff also added a C&DI addressing whether target companies in de-SPAC transactions may suspend their Section 15(d) reporting obligations after closing.

On April 4, 2025, the Securities and Exchange Commission’s Division of Corporation Finance issued a staff statement that certain USD-pegged stablecoins do not qualify as securities under federal law. The announcement defines a narrow category of “Covered Stablecoins” exempt from registration requirements.

On March 27, 2025, the U.S. Securities and Exchange Commission voted to end its defense of its final rules requiring disclosure of climate-related risks, greenhouse gas emissions, and their impact on business operations.

On March 20, 2025, the staff of the U.S. Securities and Exchange Commission’s (the SEC) Division of Corporation Finance issued new guidance that permits Form S-3 registration statements that are not automatically effective upon filing, typically used by issuers that are not well-known seasoned issuers (WKSIs), to be declared effective after the issuer files its Annual Report on Form 10-K but before filing the proxy statement containing information required by Part III of Form 10-K (Part III Information) that was properly omitted from the issuer’s timely filed Form 10-K.

On March 27, 2025, the Securities and Exchange Commission hosted a roundtable discussion on artificial intelligence in the financial industry. Acting Chairman Mark T. Uyeda and Commissioners Hester M. Peirce and Caroline A. Crenshaw delivered remarks that highlighted the SEC’s efforts to assess AI’s evolving role in finance, including its benefits, risks, and regulatory implications.

On March 12, 2025, the Securities and Exchange Commission’s Division of Corporation Finance issued a no-action letter clarifying “reasonable steps” issuers can take to verify the accredited investor status of purchasers, as required under Rule 506(c) of Regulation D, a safe harbor promulgated under the U.S. Securities Act of 1933, as amended.

On March 6, 2025, the Securities and Exchange Commission (SEC) released updated Compliance and Disclosure Interpretations (C&DIs) concerning lock-up agreements in the context of business combinations and introduced new C&DIs related to tender offers.

On March 4, 2025, the proxy advisory firm Glass, Lewis & Co. (Glass Lewis) stated in an email to its clients that it will continue to consider the diversity of a company’s board of directors when making voting recommendations with respect to the election or re-election of directors of U.S. companies.

The U.S. Securities and Exchange Commission (the SEC or Commission) is implementing significant changes to its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, aimed at modernizing filer access and enhancing cybersecurity protections. On December 27, 2024, the SEC adopted a new rule, EDGAR Filer Access and Account Management (the Rule), to formalize these updates. Effective on March 24, 2025, as part of the SEC’s transition to EDGAR Next, key security enhancements will be implemented to access account management, which include requiring individual account credentials and multi-factor authentication (MFA).

On March 3, 2025, the SEC staff announced its intention to expand its nonpublic review process for draft registration statements by enhancing accommodations for companies to submit draft registration statements for nonpublic review.

On February 27, 2025, the Securities and Exchange Commission (the SEC or the Commission) announced that it has filed a joint stipulation with Coinbase, Inc. and Coinbase Global, Inc. to dismiss the Commission’s civil suit against the two entities. The same day, the SEC’s Division of Corporation Finance (the Division) issued a staff statement clarifying that meme coins are not securities.

On February 12, 2025, the staff of the Division of Corporation Finance of the Securities and Exchange Commission (SEC) issued Staff Legal Bulletin No. 14M, which provides updated information for public companies and shareholders regarding shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 and outlines a new approach towards excluding shareholder proposals from a company’s proxy statement. 

On February 11, 2025, the staff (the Staff) of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the SEC) issued updated and new Compliance and Disclosure Interpretations (C&DIs) related to Schedules 13D and 13G under the Securities Exchange Act of 1934 (the Exchange Act).

On February 12, 2025, the European Commission proposed shortening the settlement period for European Union transactions in transferable securities from two business days (T+2) after the date of trade (T) to one business day (T+1).

On January 21, 2025, the Nasdaq Stock Market (Nasdaq) filed a proposed rule change with the Securities and Exchange Commission (SEC) to repeal its listing rules regarding board diversity disclosures (the Nasdaq Board Diversity Disclosure Rules).