Corporate & Financial Weekly Digest-February 8, 2008

SEC/CorporateRobert L. Kohl, Mark A. Conley, David A. Pentlow and Perri L. Melnick

SEC Releases Final Rule on Electronic Form D Filing

On February 6, the Securities and Exchange Commission released a final rule mandating the electronic filing of Form D through the Internet (after a phase-in period during which electronic filing will be voluntary), revising the requirements of Form D and revising Regulation D (promulgated under the Securities Act of 1933) to address general solicitation concerns raised by the advent of electronic filing and greater public availability of Form D information.

Between September 15, 2008 and March 16, 2009 issuers may file Form D either electronically or on paper; after March 16, 2009 electronic filing of Form D will become mandatory.

Among other things, the revisions to Form D:

will make Form D information available in electronic form over the Internet;

permit filers to identify all issuers in a multiple-issuer offering in one Form D filing;

delete the current requirement to identify owners of 10 percent or more of an issuer's equity securities as "related persons";

replace the current requirement for a business description of the issuer with a requirement to classify the issuer by industry from a standardized industry list;

require revenue range information (or, subject to an option to decline to disclose, net asset value range information for hedge funds);

require more specific information on the exemptions from registration claimed under the Securities Act and the Investment Company Act of 1940;

require reporting of the date of first sale in the offering and whether it is expected to last over one year;

require CRD numbers for individual recipients of sales compensation and affiliated broker-dealers;

replacing current requirements on disclosure of expenses and application of proceeds with requirements only to disclose amounts paid for sales commissions and finders' fees and use of proceeds used to make payments to executive officers, directors and promoters; and

permit a limited amount of free writing in "clarification" fields to the extent necessary to clarify certain information provided.

In addition, Rule 502(c) of Regulation D has been amended to clarify that the filing of a Form D electronically will not, in itself, violate the rule's prohibition on general solicitations and general advertising, so long as the information is provided in good faith and the issuer makes reasonable efforts to comply with the requirements of Form D.

http://www.sec.gov/rules/final/2008/33-8891.pdf

One Year Postponement of Auditor Attestation Requirements for Non-Accelerated Filers Proposed

On January 31, the Securities and Exchange Commission proposed to amend the temporary rules implementing Section 404(b) of the Sarbanes-Oxley Act of 2002 that require companies that are non-accelerated filers to include in their annual reports, an attestation report of their independent auditor on internal control over financial reporting for fiscal years ending on or after December 15, 2008. The proposed amendments postpone by one year the Section 404(b) auditor attestation requirements for smaller companies, and non-accelerated filers would not be required to provide the auditor's attestation report on internal control over financial reporting until the filing of annual reports for fiscal years ending on or after December 15, 2009.

The postponement will allow the SEC to complete a cost-benefit study to assess whether, under the newly issued guidance for management and the new auditing standard, the Section 404(b) auditor attestation requirements of the Sarbanes-Oxley Act are being implemented in a manner that will be cost-effective for smaller reporting companies. The study will collect and analyze extensive "real world" cost and benefit data from a broad array of companies currently complying with Section 404 under newly issued guidance for companies and auditors. The study will have two main parts:

A Web-based survey of companies that are subject to Section 404; and

In-depth interviews including companies that are just now becoming compliant.

The SEC will be accepting comments on the proposed extension to the auditor attestation requirement for smaller companies for 30 days after publication in the Federal Register.

http://www.sec.gov/rules/proposed/2008/33-8889.pdf

Broker Dealer James D. Van De Graaff, Daren R. Domina, Patricia L. Levy, Morris N. Simkin, Janet M. Angstadt and Lance A. Zinman

AMEX Permits Options Traders to Quote and Trade From Off-Floor

The Securities and Exchange Commission approved American Stock Exchange (Amex) amendments to Rule 958-ANTE to allow registered options traders to submit electronic quotations and orders from off the Amex's trading floor on a temporary basis for a maximum of 20 days during a calendar year. The proposal is designed to provide flexibility to registered options traders when they are temporarily unable to be present on the floor. A registered options trader must notify the Amex's Division of Regulation and Compliance immediately following...