SEC Adopts Dodd-Frank Mine Safety Disclosure Requirements

By Final Rule dated December 21, the SEC has adopted new rules outlining how mining companies must disclose the mine safety information required by the Dodd-Frank Act, including the addition of Item 1.04 to Current Report Form 8-K.  Section 1503 Dodd-Frank requires mining companies to include information about mine safety and health in the quarterly and annual reports filed with the SEC. The Dodd-Frank Act disclosure requirements are based on the safety and health requirements that apply to mines under the Federal Mine Safety and Health Act of 1977, which is administered by the Mine Safety and Health Administration (MSHA). 

The SEC adopted amendments to periodic Forms 10-K, 10-Q, 20-F and 40-F to require the disclosure mandated by Section 1503(a) of the Dodd-Frank Act; adopted new Item 104 of Regulation S-K, which sets forth the disclosure requirements for Forms 10-K and 10-Q, and amended Item 601 of Regulation S-K to add a new exhibit to Forms 10-K and 10-Q for provision of this information.  The new Form 8-K Item 1.04 implements the requirements imposed by Section 1503(b) of Dodd-Frank, and the SEC amended Form S-3 to add the new item to the list of Form 8-K items the untimely filing of which will not result in loss of Form S-3 eligibility. 

The SEC estimates that, of the approximately 13,500 Form 10-Ks filed annually, approximately 100 are filed by companies that operate, or have a subsidiary that operates, a mine subject to the Mine Act, and that therefore will be affected by the rule and form amendments.  Of the 942 Form 20-F and 205 Form 40-F annual reports filed by foreign private issuers, approximately 30 are filed by companies that  would be affected by the rule and form amendments.  The final rules, which  require disclosure on a mine-by-mine basis, take effect 30 days after publication in the Federal Register.

SEC Restricts Confidential Filing by Foreign Private Issuers

In order to promote transparency and investor protection, the SEC’s Division of Corporation Finance announced on December 8 a change to its traditional policy with respect to the confidential non-public submission of initial registration statements by foreign private issuers.  The longstanding policy was the reason that non-U.S. issuers generally were able to go public not long after they filed their registration statements. 

Foreign companies were allowed to file their registrations confidentially with the SEC, and to go through several rounds of comments without publicly registering.  By completing the rounds of comments before filing publicly, non-U.S. issuers usually spent very little time in registration before making their debuts.

New Policy: the staff will review initial registration statements of foreign issuers that are submitted on a non-public basis only where the registrant is a foreign government registering its debt securities, a foreign private issuer listed on a non-U.S. exchange, a foreign private issuer that is being privatized by a foreign government, or a foreign private issuer that can demonstrate that the public filing of an initial registration statement would conflict with the law of an applicable foreign jurisdiction.  In addition, shell companies, blank check companies and issuers with no, or substantially no, business operations will not be permitted to use the non-public submission procedure.

The previous policy was partially based on the fact that, historically, the majority of foreign private issuers registering securities with the SEC were also having their securities traded on a foreign securities exchange, and the foreign market ordinarily did not have a practice of requiring public disclosure of the registration statement before completion of review. More recently, however, the vast majority of foreign private issuers using this non-public review procedure have not contemplated listing securities outside the U.S.

EDGAR System Upgraded, Supports Schedule 14N Filings & 8-K Item 5.08

As reported in this space on August 30, 2010, the SEC adopted new rules to require companies to include shareholder-nominated director candidates in their proxy materials under certain circumstances.  The final rules were published in the Federal Register on September 16, 2010, with the effective date of November 15, 2010.  However, by order on October 4, 2010, the SEC issued a stay on their effectiveness until resolution of a legal challenge to the validity of the proxy access rules in the United States Court of Appeals. 

The SEC's final rule release published in the Federal Register on September 20, 2011, noted that the Court's mandate concluded the litigation, did not affect the amendment to the shareholder proposal rule (Exchange Act 14a-8, which was not challenged in the litigation), and the stay expired by its terms. 

On September 26, 2011, the Schedule 14N submission form types (SC 14N, SC 14N-S, and their amendments) were made available for use on EDGARLink Online.  Form 8-K Item 5.08 (Shareholder Director Nominations) was also made available for use on submission form types 8-K, 8-K12B, 8-K12G3 and 8-K15D5.  By Final Rule dated November dated November 21 and effective November 29, 2011, the SEC adopted revisions to the EDGAR Filer Manual to reflect the updates to the EDGAR system.

Going Private Transactions using Combined Schedules TO and 13E-3

The board of directors of Kiewit Investment Fund LLLP, a non-diversified, closed-end management investment company that operates as an "employees' securities company" under the Investment Company Act of 1940 Act, voted unanimously on June 28 to dissolve and liquidate the Fund.  The Fund was designed as a long-term investment vehicle primarily for participants in the Peter Kiewit Sons', Inc. Employee Ownership Plan.  A wholly-owned subsidiary of Peter Kiewit Sons' offers to purchase all outstanding limited partnership units of the Fund at at the Net Asset Value per Unit less $35 per Unit.

The Kiewit tender offer filing on November 1 is the fourth combined Tender Offer Statement and Rule 13e-3 Transaction Statement to be filed in the past year.  A $560 million cash tender offer by an affiliate of Apollo Global Management to purchase all outstanding common shares of CKx, Inc. was filed May 17.  In connection with the related merger agreement, an Apollo affiliate obtained support agreements from two significant stockholders of CKx, The Promenade Trust, the sole beneficiary of which is Lisa Marie Presley and which is CKx’s partner in Elvis Presley Enterprises, and Robert F.X. Sillerman, CKx’s largest stockholder.

The Kiewit and CKx transactions are deemed to be third-party tender offers subject to Rule 14d-1.  Combination Schedules TO and 13E-3 filed by NovaStar Financial, Inc. on 12/10/10 and by IDT Corp. on 12/3/10 are deemed to be issuer tender offers subject to Rule 13e-4.  The NovaStar filing relates to a plan to recapitalize its publicly-held 8.9% Ser. C cumulative redeemable preferred stock and its privately-held 9% Ser. D1 mandatory convertible preferred stock.  The exchange offer and consent solicitation for holders of the NovaStar Ser. C preferred was concurrently filed on Form S-4 (SEC file no. 333-171115).

IDT initiated an offer to exchange shares of its outstanding common stock for shares of Cl. B common stock on a one-for-one basis.  The company stated that the exchange offer was being made to address the limited liquidity in the market for the common stock and the resulting disparity in the trading prices between the two classes -- despite the fact that the equity rights associated with the shares of each class are nearly identical.  Following the completion of the exchange offer, the common stock was delisted from the New York Stock Exchange.  The Cl. B common stock remains listed on the NYSE under the “IDT” ticker symbol.

Risk Reporting on Form PF Required by Certain Private Fund Advisers in 2012

By Final Rule under the Investment Advisers Act of 1940 dated October 31, 2011, the SEC will require advisers to hedge funds and other private funds to report systemic risk data for use by the Financial Stability Oversight Council (“FSOC”) in monitoring risks to the U.S. financial system.  The rule, which implements Sections 404 and 406 of the Dodd-Frank Act, requires SEC-registered investment advisers with at least $150 million in private fund assets under management to periodically file a new reporting form electronically on a confidential basis (Form PF).

For hedge funds, private equity funds and liquidity funds, the information required on Form PF is tiered so that more detailed information is required from larger private fund advisers.  The rule requires heightened reporting from advisers managing at least $1.5 billion in hedge fund assets.  Although this threshold applies only to about 230 U.S.-based hedge fund advisers, those advisers manage more than 80% of the industry’s assets under management.

There will be a two-stage phase-in period for compliance with Form PF filing requirements.  Most private fund advisers will be required to begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after Dec. 15, 2012.  Those with $5 billion or more in private fund assets must begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after June 15, 2012. 

Form PF is a joint effort of the SEC and the Commodity Futures Trading Commission.  Staff consulted with the U.K.’s Financial Services Authority and other members of the International Organization of Securities Commissions.  The resulting Form PF is similar in many respects to the European Securities and Markets Authority’s proposed private fund reporting template and surveys of large hedge fund advisers conducted by foreign financial regulators.