07.22.2010

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Updates

President Obama Signs the Dodd-Frank Bill into Law

On Wednesday, July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 into law.  President Obama described the reforms contained in the Act as "the strongest consumer protections in history."  Specific provisions of the Dodd-Frank will be the subject of forthcoming Perkins Coie Updates, including the two described below.

Perkins Coie Publishes First Two in Series of Updates Offering Practical Advice on the Implications of the Financial Reform Act

On Wednesday, July 21, 2010, Perkins Coie published the first two in a series of updates providing an overview of the salient provisions of the historic Dodd-Frank Wall Street Reform and Consumer Protection Act.  Over the next several months, Perkins Coie will be publishing additional in depth articles regarding the new legislation and its practical implications for our clients.  Click here to see all of our published Updates on this topic.

New Corporate Governance, Executive Compensation and Proxy Voting Provisions Apply to All Public Companies

  • While the Financial Reform Act recently approved by Congress primarily addresses financial regulation, it also contains significant new corporate governance, executive compensation, and proxy voting provisions that affect all U.S. public companies.
  • This Update summarizes those provisions, and includes practical advice on steps companies can take in anticipation of the 2011 proxy season as well as a table with information on how and when each provision will become applicable.
  • Key provisions summarized in this Update include:
  • shareholder votes on executive compensation and golden parachutes;
  • new executive compensation disclosure—pay-versus-performance and internal pay ratio;
  • mandatory clawback of some incentive compensation;
  • disclosure of company policies on hedging of company securities by directors or employees;
  • elimination of discretionary voting by brokers on executive compensation and other matters;
  • new independence requirements and considerations for compensation committees and their advisors; and
  • shareholder access to proxy materials to nominate directors.

Read this Update.

Financial Reform Legislation Imposes New Requirements on Private Funds and Their Advisers

  • With new rules concerning registration requirements under the Investment Advisers Act, the Financial Reform Act will expand the number of private funds required to register.
  • Based on the Financial Reform Act's limitations on performance based compensation and new recordkeeping and reporting obligations, private fund advisers should examine their fund structures and compensation models as well as ensure well-defined administrative protocols.
  • Private funds will need to examine revisions to the definition of 'Accredited Investor' contained in the Financial Reform Act when structuring and marketing future private fund activities.
  • The Financial Reform Act adopted a limited Volcker rule which will affect banking entities' abilities to sponsor private equity and hedge funds and places restrictions on proprietary trading. 

Read this Update.

SEC Creates New Offices at the Division of Corporation Finance

On Friday, July 16, 2010, the SEC's Division of Corporation Finance announced the creation of three new specialized offices.  These new offices will focus on "large financial institutions, asset-backed securities and other structured products, and securities offering trends."  It is worth noting that the new Financial Services Review Office will allow the SEC to increase the number of financial institutions subject to real-time review of periodic-reports filed with the SEC.

Read the SEC's press release.


 

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