SOX 404 Exemption for Small Companies
November 9th, 2009
On November 4, 2009, the House Financial Service Committee approved an amendment which will permanently exempt small companies (non-accelerated filers) from requirements of Section 404(b) of Sarbanes-Oxley Act.
Under Section 404(b), companies are required to receive an auditor attestation on the effectiveness of their internal controls over financial reporting. The compliance requirement is particularly burdensome for small companies with market capitalization below $75 million dollars, prompting the Securities and Exchange Commission to repeatedly provide extensions to the compliance deadline for these filers since the enactment of Sarbanes-Oxley in 2002; the last and final six-month extension being granted on October 2, 2009.
The bill will have to pass in the full House and Senate, before it can be signed into law by the President. Nonetheless, non-accelerated filers will still be required to review and disclose the state of their internal controls, in accordance with Section 404(a).
Tags: amendment, exemption, non-accelerated filers, SEC, SOX 404
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New SEC Rules to Enhance Investor Confidence and Corporate Governance
July 6th, 2009
On Wednesday, July 1, 2009, the Securities and Exchange Commission announced changes to its policies. The Commission approved three initiatives intended to improve accountability of companies to their shareholders:
1. Shareholder Approval of Executive Compensation of TARP Recipients
Companies that receive financial assistance from the Troubled Asset Relief Program (TARP) will have to provide a separate shareholder vote on executive compensation in proxy solicitations for their annual meeting. Yet smaller reporting companies may be excluded from the requirement to include a compensation discussion and analysis in the proxy statements.
2. Proxy Disclosure & Solicitation Enhancement
Companies will be required to enhance their disclosure on compensation and corporate governance. The new rules will require directors to provide better disclosure of their experience. Companies will have to describe the qualifications of their directors, top executives, and board nominees. Executive compensation disclosure requirements will be also enhanced, including the reporting of annual and option awards to directors and executives. Among other things, companies will have to disclose how their leadership structure was developed, as well as discuss the effect of the companies’ compensation policies on their risk.
3. Discretionary Proxy Voting by Broker-Dealers
Under the new rules, the brokers will not be allowed to vote on behalf of shareholders without instructions to do so. Broker discretionary voting for all election of directors will be eliminated.
The SEC is currently seeking pubic comments regarding the proposed enactments.
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How to go public cheaper and faster
May 12th, 2009
While the initial public offering market has dried up, don’t tell that to Penny Green, a securities lawyer at Bacchus in Vancouver. She has six IPOs in the pipeline — just not for the Canadian big board — the TSX — or even the TSX Venture Exchange. Rather, Ms. Green’s focus is the Canadian National Stock Exchange, or CNSX, which is providing small and mid-sized companies with an alternative to going public than the traditional exchanges.
“People are suddenly aware there’s a full exhange out there that’s an alternative to the TSX Venture,” she says. “In these economic times, people are looking for ways to save money and it makes a huge difference if you list on the CNSX. It’s faster and less expensive. Also, there’s greater certainty you’ll actually complete your listing. They’re much easier to work with and give conditional approvals earlier.”
Read the full article: “Article Quoting Penny Green Lawyer on Going Public Faster“. (Click here for PDF version)
Tags: article, Canadian National Stock Exchange, CN, go public cheaper, IPO's, lawyer, penny green
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Penny Green in the National Post
May 12th, 2009
Penny Green is featured in the article titled How to Go Public Cheaper and Faster, in the May 11, 2009 edition of the National Post.
In the article Penny discusses the advantages of Canadian National Stock Exchange (CNSX), an alternative to the tranditional exchanges which allows small and mid-sized companies to lower their listing costs.
“People are suddenly aware there’s a full exchange out there that’s an alternative to the TSX Venture,” she says. “In these economic times, people are looking for ways to save money and it makes a huge difference if you list on the CNSX. It’s faster and less expensive. Also, there’s greater certainty you’ll actually complete your listing. They’re much easier to work with and give conditional approvals earlier.”
Please follow the link below for the full text of the article:
http://www.nationalpost.com/story.html?id=1583311
Tags: article, CNSX
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Bacchus Announces New Associate
April 23rd, 2009
We’d also like to introduce Peter Torn, a new associate who has joined the Bacchus team after leaving Lang Michener. Peter Torn joins our office from a national law firm with nearly 15 years of global experience in law and in business. His practice will initially focus on advising clients on corporate and commercial matters. Mr. Torn has advised technology companies in licensing and corporate finance. His business counseling has included direct involvement in private placements, takeover and share purchase offers, asset purchase agreements, corporate restructurings, and disclosure and governance matters.
Prior to his legal career, Mr. Torn worked for two of the world’s largest technology companies and for the largest global management company; using his insight gained as a strategic consultant, he takes a comprehensive approach to resolving legal issues from a management viewpoint and is well equipped to serve as both a legal and business advisor to companies of all size.
Tags: bacchus, business, commercial, corporate, law, legal, licensing, Peter Torn, technology
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TSX Venture Exchange Announces Amendments to Policies
February 10th, 2009
The TSX Venture Exchange (TSX-V) announced that effective December 15, 2008, it will implement a number of changes to its policies. These changes are in effort to streamline the existing policies and in some cases make them consistent with the policies of the Toronto Stock Exchange (TSX). They are also being amended to remove certain existing differences between Tier 1 and Tier 2 issuers.
Below is a brief summary of the TSX-V amendments, however it should not be relied upon as legal advice. We encourage you to contact Penny Green for a detailed explanation of how these amendments will impact your listed company going forward.
We direct you to the TSX-V website which provides a full description of the recent amendments (http://www.tsx.com/en/pdf/November3-2008_ETF-Tier1-Tier2.pdf) and to a bulletin issued by the TSX-V on December 18, 2008 (http://www.tsx.com/en/news_events/news_releases/12-18-2008_TSXVenture-Bulletin.html)
General
Provisions relating to general discretion of the TSX-V in each policy have been removed unless they relate to something specific. There is a general discretion provision in the interpretation policy, which clarifies that the TSX-V, when exercising discretion, will take into account the public interest.
Hold Periods
The hold period applied by the TSX-V has been modified so as to remove the TSX-V hold period except where securities are issued:
· to directors, officers and promoters;
· persons holding securities carrying more than 10% of voting rights attached to Issuer’s securities both immediately before and after the transaction, and who have elected or appointed or have the right to elect or appoint one or more directors or senior officers of the issuer; or
· at a discount greater than 10% to the Market Price.
Share Purchase Warrants
The term of share purchase warrants has been extended from two years to five years in all policies where share purchase warrants are applicable. The five year term applies to both Tier 1 and 2 Issuers.
Incentive Stock Options
The maximum term of options granted by Tier 2 issuers will be extended from 5 years to 10 years. The five year term now applies to both Tier 1 and 2 Issuers.
Directors, Officers and Corporate Governance
Issuers must have a corporate secretary.
Escrow Periods
The release period for surplus escrow agreements has been reduced from six years to three years.
The most significant changes are to the following TSX-V policies:
2.3 – Listing Procedures
3.1 – Directors, Officers, Corporate Governance
3.3 - Timely Disclosure
3.4 - Investor Relations, Promotional and Market Making Activities
4.1 - Private Placements
4.5 - Rights Offerings
5.4 - Escrow Vendor Consideration and Resale Restrictions
5.8 - Name Changes, Security Consolidations and Splits.
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U.S. Securities Bulletin - Winter 2008
December 1st, 2008
This publication has been prepared by our professionals to provide you with updates and commentary on cross-boarder business and securities law developments, regulatory and corporate compliance matters, and potential implications for your business.
Please contact us if you have any questions with respect to the issues covered in the articles and we would be happy to discuss them with you.
Click here to view the bulletin in PDF format
Tags: cross-boarder securities law, publication, securities bulletin
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The Adoption of IFRS – A Global Financial Reporting Standard
November 27th, 2008
Issuers listed on a North American stock exchange who are thinking of adopting International Financial Reporting Standards should read this update:
As of March 4, 2008, the SEC is allowing foreign private issuers filing on a Form 20-F to submit financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) that are issued by the International Accounting Standards Board (“IASB”) without a reconciliation to US GAAP. The amendments to Form 20-F and Regulation S-X apply to financial statements for fiscal years ending after November 15, 2007, and to interim periods within that fiscal year that are filed on or after March 4, 2008.
Canadian regulators (through the Canadian Securities Administrators, “CSA”) , jointly with the Accounting Standards Board, plan to implement IFRS by January 1, 2011, at which time IFRS will become mandatory in Canada for fiscal periods ending after January 1, 2011. This will benefit Canadian registrants required to file with the SEC by allowing them to prepare a single set of financial statements without incurring the costs of reconciling between US and Canadian GAAP. The CSA is considering amending National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency to reference IFRS as an alternative to Canadian GAAP in the CICA Handbook, the reference manual governing Canadian GAAP used by Canadian auditors.
The CSA has not yet determined whether to accept the use of IFRS by Canadian issuers filing in Canada before January 1, 2011.
Canadian registrants who are currently SEC registrants have the option of using US GAAP in their domestic filings in Canada, but are not currently permitted to file domestic filings using IFRS.
The CSA released a Concept Paper (CSA Concept Paper 52-402) on February 13, 2008 discussing a number of issues, including a weighing of the pros and cons of allowing early adoption of IFRS by Canadian registrants prior to January 1, 2011. In Brief, the CSA stated that on balance it believes early adoption is favourable and the benefits (reduced compliance costs for some registrants and increased knowledge of IFRS by investors, regulators, issuers, auditors, educators, etc.) outweigh any negative implications (reduced comparability of financial statements; confusion on the part of investors caused by adoption a third permissible financial reporting standard until January 1, 2011; and lack of expertise in Canada on the part of accountants, executive officers, directors, auditors and regulators respecting IFRS)
The CSA has requested public input on the proposed amendments concerning IFRS, including early adoption prior to the proposed mandatory date of implementation currently set for January 1, 2011. More information can be found at the following link:
http://www.csa-acvm.ca/html_CSA/news/08_06_comment_IFRS.htm
Tags: accounting standards, amendment, CSA, Form 20-F, IASB, IFRS, Regulation S-X, regulators, SEC
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Sustainability 2008
November 17th, 2008
Bacchus Corporate and Securities Law participated as exhibitors and speakers in Sustainability 2008 Canada’s Green Investment Conference, which took place at the Vancouver Convention & Exhibition Centre on October 24 and 25, 2008. Sustainability 2008 is the first major Canadian investment conference focused exclusively on the Green Tech sector prospects. The list of participants and speakers included leading Clean Tech organizations in such sectors as alternative energy, green construction, clean transportation, recycling, carbon capture and air purification.
35 speakers presented at the event on opportunities in clean technologies, regulatory drivers, and Canada’s international Clean Tech profile. Robert Galletti, Associate was one of the speakers at the conference. Robert Galletti was speaking on the topic of Capital Raising and Tax Incentives for Emerging Businesses in Canada. Robert provided an overview of British Columbia securities law and the recent legislative changes that can significantly impact companies’ capital raising strategies. With respect to federal and provincial SR&ED (Scientific Research and Experimental Development) tax incentive program Robert highlighted major advantages it presents to Clean Tech businesses and delineated eligibility criteria of the program.
Tags: green tech, law, robert galletti, securities, sustainability, technology
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2nd Advanced Securities Compliance Course
November 17th, 2008
On September 15, 2008, Penny Green, the principal of Bacchus Corporate and Securities Law was a speaker at a panel of leading securities professionals of the 2nd Advanced Securities Compliance Course which took place at Pan Pacific Vancouver Hotel. Among other speakers were Mark L. Skwarok of Lang Michener LLP, Adrianne Marskell of British Columbia Securities Commission, Jeffrey A. Read of Fraser Milner Casgrain LLP, Harjit S. Sangra of Sangra Moller LLP, Fred R. Pletcher of Borden Ladner Grevais LLP, Patrick J. Sullivan and Robert W. Taylor of Taylor Veinotte Sullivan, Douglas Garrod of Global Securities Corporation. The presenters’ topics focused on different aspect of securities compliance, including best practices for continuous disclosure, compliance policy in the situations of takeover bids and internal investigations.
In her presentation entitled “Managing a Cross-Boarder Securities Compliance Program”, Penny discussed the framework of cross-boarder requirements for compliance and ethics program, the challenges placed on cross-boarder and small companies, and the approaches and steps to be taken by the companies to ensure implementation of effective securities compliance programs guiding multiple aspects of their day-to-day business activities, including investor relations,disclosure and education. Penny further addressed the implications of the new BC instrument BCI 51-509 Issuers Quoted in The U.S. Over-the-Counter Markets for smaller reporting companies and their compliance policies, pointing out the importance of a balance between investor protection that the instrument is intended to achieve on one hand, and unfortunate hardships placed on legitimate small businesses for whom the cost of compliance is potentially prohibitive.
Tags: attorney, bc, canada, cross-border, law, lawyer, penny green, securities, u.s., vancouver
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