13 June 2018
by Jeanne R. Solomon and Valerie Ben-Or This week's Corporate news roundup includes information regarding the SEC's new Compliance and Disclosure Interpretation (CD&I) regarding the use of Form S-4 and A/B exchanges (exchanges of non-convertible debt that was privately issued for substantially similar securities that are registered) and its proposed amendments to eliminate redundant, outdated or superseded provisions governing disclosure of information, and the U.S. EPA's new rules requiring landfills to install controls of methane emissions at a threshold that is one-third lower than the current requirements: SEC ISSUES NEW COMPLIANCE AND DISCLOSURE INTERPRETATIONS RELATING TO FORM S-4 AND A/B EXCHANGES The SEC has issued new Compliance and Disclosure Interpretations (C&DIs) regarding the use of Form S-4 and an exchange of non-convertible debt that was privately issued for substantially similar securities that are registered (called an A/B exchange). As a condition to not objecting to the registration of such an offering, an issuer must make certain representations, including that issuer has: (a) not entered into any arrangement or understanding with any person who will receive securities in the exchange offer with a view to distributing those securities following the offer's completion (and including in the transmittal letter an acknowledgement to be executed by each exchange offer participant that it does not intend to engage in a distribution); (b) disclosed to each exchange offer participant that if the participant acquires the securities for the purpose of distribution, such person must be identified in the prospectus as an underwriter and cannot rely on the SEC's Exxon Capital line of interpretive positions; and © included in its transmittal letter an acknowledgement for each broker-dealer exchanging securities that such broker-dealer will satisfy any prospectus delivery requirements in connection with any resale. For more information, click here and here. THE U.S. EPA FINALIZES RULES TO REDUCE METHANE EMISSIONS IN LANDFILLS On July 15, 2016, the EPA finalized rules to reduce methane emissions at landfills. The new rules lower the emission threshold at which a landfill must install controls to levels one-third lower than the current requirements. In order to comply with the new rules, landfill owners will be required to control the gas by routing it to a non-enclosed flare, an enclosed combustion chamber or a treatment system that processes the gas for subsequent sale or use. The new rules are expected to reduce methane emissions by approximately 334,000 tons per year beginning in 2025. For more information, click here. SEC PROPOSES TO SIMPLIFY DISCLOSURE REQUIREMENTS The SEC recently proposed amendments to eliminate redundant, outdated or superseded provisions governing disclosure in light of changes in SEC disclosure requirements, technology and U.S.-GAAP and International Financial Reporting Standards (IFRS). The proposed rules include the SEC's solicitation for comment as to whether to delete disclosure requirements that overlap with U.S.-GAAP such as certain disclosures under Regulation S-X regarding significant changes in issued amounts of debt. The proposed rules also include the substitution of the requirement to disclose historical market price information with the ability to disclose only the issuer's ticker symbol (which may be used by investors to obtain historical price information). For more information, click here. To subscribe to our weekly Corporate e-newsletter and receive future news updates, please click here. If you would like to read up on previously published Corporate-related news, please visit our e-newsletter archive by clicking here.