SEC approves amendments to the NYSE’s substantial stockholder issuance rule and 20 per cent rule for shareholder approval of certain private offerings

2019 ◽  
Vol 20 (2) ◽  
pp. 16-19
Author(s):  
Justin Hoffman ◽  
Jude Dworaczyk
Keyword(s):  
New York ◽  
Listed Company ◽  
Market Value ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Book Value ◽  
The Us ◽  
Before And After ◽  
Private Placements ◽  
Definition Of

Purpose To explain recent amendments by the US Securities and Exchange Commission (the SEC) to Sections 312.03(b) relating to issuances of securities to substantial stockholders (the Substantial Stockholder Issuance Rule) and 312.03(c) (the 20 Per cent Rule) of the New York Stock Exchange’s (the NYSE) Listed Company Manual to change the definition of “market value” for purposes of the 20 Per cent Rule and eliminate the requirement for shareholder approval of certain private issuances at a price less than book value but greater than market value. Design/methodology/approach This article provides background on the purpose and policy behind the Substantial Stockholder Issuance Rule and the 20 Per cent Rule and summarizes the provisions of each rule, both before and after the recent SEC amendments thereto. This article then highlights the most important changes to the Substantial Stockholder Issuance Rule and the 20 Per cent Rule and explains the implications thereof for NYSE-listed issuers. Findings The amended Substantial Stockholder Issuance Rule and the 20 Per cent Rule provide NYSE-listed issuers greater flexibility in structuring transactions involving private placements of equity and will likely reduce the number of such transactions requiring a shareholder vote. Originality/value Practical guidance from experienced corporate finance and capital markets lawyers.

US SEC approves amendments to Nasdaq’s 20 per cent rule for shareholder approval of certain private offerings

2019 ◽  
Vol 20 (1) ◽  
pp. 1-4 ◽  
Author(s):  
Justin F. Hoffman ◽  
Jude A. Dworaczyk
Keyword(s):  
Design Methodology ◽  
Market Value ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Book Value ◽  
The Us ◽  
Before And After ◽  
Private Placements ◽  
Practical Guidance ◽  
Definition Of

Purpose To explain a recent amendment by the US Securities and Exchange Commission (the SEC) to Nasdaq Rule 5635(d) (the 20 per cent Rule) to change the definition of “market value” for purposes of the 20 per cent Rule and eliminate the requirement for shareholder approval of certain private issuances at a price less than book value but greater than market value. Design/methodology/approach This article provides background on the purpose and policy behind the 20 per cent Rule and summarizes the provisions of the 20 per cent rule, both before and after the recent SEC amendment thereto. This article then highlights the most important changes to the 20 per cent Rule and explains the implications thereof for Nasdaq-listed issuers. Findings The amended 20 per cent Rule provides Nasdaq-listed issuers greater flexibility in structuring transactions involving private placements of equity and will likely reduce the number of such transactions requiring a shareholder vote. Originality/value Practical guidance from experienced corporate finance and capital markets lawyers.

Corporate liquidity, supply chain and cost issues awareness within the Covid-19 context: evidence from us management reports’ textual analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Athanasios Fassas ◽  
Sotirios Bellos ◽  
George Kladakis
Keyword(s):  
Empirical Analysis ◽  
Textual Analysis ◽  
Securities And Exchange Commission ◽  
Business Community ◽  
Workforce Reduction ◽  
Content Type ◽  
Related Information ◽  
Document Frequency ◽  
The Us ◽  
Before And After

Purpose The purpose of this study is to assess the management responses and intentions of 3,279 US firms from all industries, before and after the coronavirus outbreak, to identify the level of managerial concern about specific financial issues and potential economic costs of the COVID-19 pandemic. Design/methodology/approach This paper uses textual analysis of official management reports to search for specific single words in five domains related to corporate finance and governance. This paper focuses on the relative frequency of single words using a weighting scheme that adjusts for document length and for the inverse document frequency. This paper then uses t-tests to investigate the univariate differences across groups of reports before and after the US stock market crash in February 2020. Findings The applied textual and empirical analysis provides evidence that firms’ primary concerns relate to the disruption in supply chains, liquidity need and coronavirus-led recession. This paper also shows that the main cost reduction measure they are considering is salary reduction, rather than workforce reduction. This paper also shows evidence that firm managers are rather swift to provide coronavirus-related information in the US Securities and Exchange Commission (SEC) corporate filings. Practical implications The findings provide a primary view of the directions, on which US firms will move in the near future, and thus, they can be used as tools for the formulation of appropriate government policies in the corresponding sectors, which could mitigate the economic risks related to the pandemic. At the business level, the disseminated knowledge can assist firms either in the same sector or in similar/related sectors to “locate” themselves within the map of the pandemic and to adjust or align correspondingly their strategies and decisions as they will have a view of the bigger picture. Originality/value The empirical analysis divulges US firms’ management primary concerns after the COVID-19 outbreak, and thus, offers insights to the processes taking place in the US business community and the formulating new corporate and economic reality.

Absence of the weekend effect and industry-style portfolios

2019 ◽  
Vol 12 (4) ◽  
pp. 463-475
Author(s):  
Selma Izadi ◽  
Abdullah Noman
Keyword(s):  
New York ◽  
Stock Market ◽  
Structural Breaks ◽  
Stock Exchange ◽  
Structural Break ◽  
Weekend Effect ◽  
Content Type ◽  
Market Portfolio ◽  
The Us ◽  
Using Data

Purpose The existence of the weekend effect has been reported from the 1950s to 1970s in the US stock markets. Recently, Robins and Smith (2016, Critical Finance Review, 5: 417-424) have argued that the weekend effect has disappeared after 1975. Using data on the market portfolio, they document existence of structural break before 1975 and absence of any weekend effects after that date. The purpose of this study is to contribute some new empirical evidences on the weekend effect for the industry-style portfolios in the US stock market using data over 90 years. Design/methodology/approach The authors re-examine persistence or reversal of the weekend effect in the industry portfolios consisting of The New York Stock Exchange (NYSE), The American Stock Exchange (AMEX) and The National Association of Securities Dealers Automated Quotations exchange (NASDAQ) stocks using daily returns from 1926 to 2017. Our results confirm varying dates for structural breaks across industrial portfolios. Findings As for the existence of weekend effects, the authors get mixed results for different portfolios. However, the overall findings provide broad support for the absence of weekend effects in most of the industrial portfolios as reported in Robins and Smith (2016). In addition, structural breaks for other weekdays and days of the week effects for other days have also been documented in the paper. Originality/value As far as the authors are aware, this paper is the first research that analyzes weekend effect for the industry-style portfolios in the US stock market using data over 90 years.

A model for the elaboration of fair divisional projects in inheritance disputes

2018 ◽  
Vol 36 (2) ◽  
pp. 186-202
Author(s):  
Francesco Tajani ◽  
Pierluigi Morano
Keyword(s):  
Design Methodology ◽  
Market Value ◽  
Content Type ◽  
Mathematical Formulas ◽  
Mathematical Algorithms ◽  
Complex Inheritance ◽  
Fundamental Value ◽  
Definition Of ◽  
Calculation Software ◽  
Legal Right

Purpose The purpose of this paper is to develop a method to support the definition of efficient and fair divisional projects in particularly complex cases concerning inheritance disputes. Design/methodology/approach First, the approach involves an appraisal of the market value of the assets, along with an analysis of the respective conditions of concrete divisibility; then, two mathematical models have been developed for the assignment of the assets to the subjects involved in the divisional projects. The logic underlying of both models has been translated into mathematical algorithms that allow for the minimization of the monetary compensations resulting from the differences between the legal right shares and the actual portions to be attributed to them. Findings Both models have been developed through mathematical formulas that can be easily implemented by using an appropriate calculation software. They can be used in particularly complex inheritance divisions, in which the deceased’s assets are numerous and there are several heirs with similar or different legal right shares. Originality/value The methodology is useful in the disputes that could arise in hereditary successions. The fundamental value is that the models could support the definition of the best solution in particularly complex situations, characterized by a large number of assets to be assigned and/or the existence of “preferential” constraints for the assignment of the assets.

Linkage between Economic Value Added and Market Value: An Analysis

2000 ◽  
Vol 25 (3) ◽  
pp. 23-36 ◽  
Author(s):  
Ashok Banerjee
Keyword(s):  
New York ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Shareholder Wealth ◽  
Indian Context ◽  
The Us ◽  
Generating Capacity ◽  
The Cost ◽  
Future Growth

Maximizing shareholder value has become the new corporate paradigm. Corporations in the US have started disclosing EVA information from the beginning of 90s as a measure of corporate performance. It is believed that market value of a firm (hence shareholder wealth) would increase with the increase in EVA. Various studies done in the US also confirm this belief. EVA (a term coined and registered by Stern Stewart & Co. New York) is a residual income that subtracts the cost of capital from the operating profits generated by a business. The present study makes an at tempt to find the relevance of Stewart's claim that market value of the firm is largely driven by its EVA generating capacity in the Indian context. Based on a sample of 200 firms over a period of five years, the study shows that market value of a firm can be well predicted by estimated future EVA streams. The study has also found that market value of most of the firms in the sample is explained more by current operational value than future growth value of firms.

scholarly journals Media and Foreign Policy on Pak-Afghan Relations (1997-2005): The Role of US and Pakistani Press

2020 ◽  
Vol Volume 4 (Issue 2) ◽  
pp. 454-477
Author(s):  
Ashraf Iqbal ◽  
Dr. Tanveer Hussain ◽  
Javed
Keyword(s):  
New York ◽  
Foreign Policy ◽  
American Foreign Policy ◽  
New York Times ◽  
Washington Post ◽  
War On Terrorism ◽  
Bilateral Relations ◽  
Time Period ◽  
The Us ◽  
Before And After

The main purpose of the present research is to investigate Pak-Afghan relations in the editorials of US newspapers, The Washington Post & The New York Times and Pakistani newspapers Dawn & The News related to the following issues during the period 1997-2005; A) US as a factor in Pak-Afghan relation, B) Coverage of Islam/Muslims regarding war on terrorism, C) Pakistan’s stance on Pak-Afghan bilateral relations, and D) US’s stance on Pak-Afghan bilateral relations. The time period to be examined in this proposed study spans over eight years regarding the editorial coverage of Pak-Afghan relations in the US and Pakistani leading English Press. Triangulation method based on qualitative and quantitative method was used to conduct the present research. The results show that the editorial contents of USA and Pakistani newspapers were not different regarding Pak-Afghan relations before and after 9/11. The incident of 9/11 changed the American foreign policy towards developing and least developing nations especially Muslims states like Pakistan, Afghanistan, Iraq, and Iran etc. Pakistani press highlighted the issues regarding the Pak-Afghan relations before and after 9/11 as a favorable and conducive, related to Muslim/Islam regarding war on terrorism. The study suggested that instead of the focus on military resolution of the different problems, rather social bilateral negations should be prioritized which would be long lasting and full of mutual respects and honor.

Aztec multilatinas: characteristics and strategies of Mexican multinationals

2018 ◽  
Vol 28 (1) ◽  
pp. 2-18 ◽  
Author(s):  
Jose L. Huesca-Dorantes ◽  
Snejina Michailova ◽  
Christina Stringer
Keyword(s):  
Multinational Enterprises ◽  
Stock Exchange ◽  
Geographical Location ◽  
Securities And Exchange Commission ◽  
Data Sources ◽  
Annual Reports ◽  
Content Type ◽  
Making Sense ◽  
The Us ◽  
Internationalization Strategies

Purpose This paper provides an overview of the Aztec 13 – the top 13 multinational enterprises in Mexico. Different from research that groups countries and regions, the purpose of the paper is to deliver a nuanced picture of these multinationals in terms of their key characteristics and the strategies they follow when they internationalize. Design/methodology/approach All data sources that have been identified and reviewed are documents, printed and electronic. The Aztec multilatinas were identified using Forbes Global 2000 (2017). Other data sources such as media texts, company annual reports, reports filed with the Mexican Stock Exchange and the US Securities and Exchange Commission, as well as investor presentations, were collected and analyzed. Data sources were published in English and Spanish. The analytic procedure adopted entailed identifying, selecting, making sense of and synthesizing the data contained in the documents. Findings Aztec multilatinas have specific characteristics which, to a great extent, influence their internationalization strategies. Characteristics include the geographical location of their headquarters, their origin and history, their ownership structure and ties with families and government. These factors, combined, help to describe in greater nuance the internationalization strategies and activities of the Aztec 13. Such a detailed and focused description is a first necessary step for subsequent potential theorizing. Originality/value This paper contributes to the vibrant scholarly conversation on multinational enterprises from less researched regions and countries. Latin America is such a region and Mexico is such a country. Focusing on a single country and its top 13 multinationals allow a comprehensive description and disciplined analysis, with no dangerous generalizations to large regions and even larger settings such as emerging markets multinationals and with no false claims for theorizing.

SEC adopts rules and interpretive guidance designed to enhance and clarify the obligations of financial professionals

2019 ◽  
Vol 20 (4) ◽  
pp. 35-44
Author(s):  
Michael R. Rosella ◽  
Vadim Avdeychik ◽  
Justin R. Capozzi
Keyword(s):  
Historical Context ◽  
Legal Counsel ◽  
Legal Analysis ◽  
Best Interest ◽  
Extensive Experience ◽  
Content Type ◽  
The Us ◽  
Investment Advisers ◽  
Definition Of ◽  
Practical Implications

Purpose This article provides an overview of the US Securities and Exchange Commission’s (SEC) recent approval of a package of rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. Design/Methodology/Approach The article provides legal analysis for and historical context of the requirements of the SEC’s adopted rules, Regulation Best Interest and Form CRS in addition to the two separate interpretations under the Investment Advisers Act of 1940, the Standard of Conduct for Investment Advisers; and the Broker-Dealer Exclusion from the Definition of Investment Adviser. Findings The SEC’s adopted regulatory package does not adopt a uniform fiduciary standard for broker-dealers and investment advisers but instead promulgates legal requirements and mandated disclosures in order to conform to the SEC’s perceived expectations for reasonable investors. Practical implications Investment advisers and broker-dealers should consult with their legal counsel in assessing how and to what extent the new regulatory package is applicable to them. Originality/Value This article provides practical guidance from lawyers who have extensive experience with the Investment Company Act, Investment Advisers Act, and the Securities Acts.

Does institutional ownership affect the value relevance of accounting information?

2020 ◽  
Vol 28 (2) ◽  
pp. 323-342
Author(s):  
Mohamed Omran ◽  
Yasean A. Tahat
Keyword(s):  
Value Relevance ◽  
Accounting Information ◽  
Market Value ◽  
Institutional Ownership ◽  
Financial Leverage ◽  
Content Type ◽  
Book Value ◽  
Share Prices ◽  
Listed Firms ◽  
Positive Effects

Purpose Drawing upon agency theory, this study aims to assess the value relevance (VR) of accounting information released by non-financial firms listed on the Kuwait stock exchange for the period of 2015-2018. Also, the influence of institutional ownership level and other explanatory variables, namely, book value per share, earnings per share, growth in assets and changes in financial leverage on share prices is examined. Design/methodology/approach To test the hypotheses, the Ohlson (1995) model is extended. This study uses panel data analysis and applies appropriate statistical techniques to measure empirical relationships. Findings The results show that the VR of accounting information released by the Kuwaiti non-financial listed firms varies over the period of 2015-2018. Book value and earnings have significant and positive effects on share prices. In recent years, the VR of book value information has been growing, while that of earnings information has been declining. Institutional ownership level has a significant and positive influence on the VR of accounting information released by the Kuwaiti non-financial listed firms. The findings confirm a positive power, signalling growth in assets regarding the share prices. However, no significant relationship between changes in financial leverage and share prices is found. Practical implications The findings of the study provide evidence of the linkage between VR and institutional ownership level, which promotes the understanding of the influence of institutional investors on a firm’s market value. Empirical evidence from Kuwait will have international implications and can serve as a guide for accounting researchers studying other emerging markets. Capital market regulators can provide guidelines in the form of information characteristics and elements of financial statements that need improvement. Finally, the findings assist non-financial listed firms to enhance the quality of accounting information by identifying the strengths and weaknesses in their financial reports. Originality/value This study extends the previous literature by investigating a relatively new set of data in more depth than that has been examined by prior research, which focusses on the relationship between accounting information and the firm’s market value.

Bringing order to non-GAAP financial measures: SEC sues to enforce “equal-or-greater-prominence” requirement

2019 ◽  
Vol 20 (4) ◽  
pp. 51-57
Author(s):  
Richard J. Parrino
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Financial Measures ◽  
Generally Accepted Accounting Principles ◽  
Enforcement Action ◽  
Accounting Principles ◽  
Depth Analysis ◽  
The Us ◽  
Earnings Releases

Purpose This article examines the first action by the US Securities and Exchange Commission to enforce the “equal-or-greater-prominence” requirement of its rules governing the presentation by SEC-reporting companies, in their SEC filings and earnings releases, of financial measures not prepared in accordance with generally accepted accounting principles (GAAP). Design/methodology/approach This article provides an in-depth analysis of the equal-or-greater-prominence rule and the SEC’s enforcement posture in the context of the SEC’s concern that some companies present non-GAAP financial measures in a manner that inappropriately gives the non-GAAP measures greater authority than the comparable GAAP financial measures. Findings Although the appropriate use of non-GAAP financial measures can enhance investor understanding of a company’s business and operating results, investors could be misled about the company’s GAAP results by disclosures that unduly highlight non-GAAP measures. The SEC’s enforcement action signals a focus on the manner in which companies present non-GAAP financial measures as well as on how they calculate the measures. Originality/value This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.

Sign in / Sign up

Export Citation Format

Share Document