My calendar runs my life. If I didn’t set reminders to take out the trash, I wouldn’t remember when pickup day is. In case you’re anything like me, I’m sharing the important upcoming dates on my work calendar.
October 1, 2023: Form 10-Ks for fiscal years beginning after this date must include insider trading policy and disclosure (smaller reporting companies)
Under the SEC’s amendments to Rule 10b5-1, public companies are required to file a copy of their insider trading policies and procedures with their annual report on Form 10-K. For companies that are not smaller reporting companies, this requirement began in Form 10-Ks for fiscal years beginning after April 1, 2023. In addition to filing a copy of the policy, companies must add disclosure to the filing itself, as described in our team’s article from December 2022.
October 1, 2023: New share repurchase disclosure rules in effect
For full fiscal quarters beginning on or after this date, public companies must report daily (instead of monthly) repurchase activity in Form 10-Ks or Form 10-Qs, along with narrative disclosure about the rationale for the repurchases and process used to determine the amount of the repurchases. In addition, disclosure about Rule 10b5-1 trading plans will be required in these reports, as outlined in our article from this spring.
December 1, 2023: NYSE and Nasdaq-listed companies need clawback policy
By this date, each NYSE and Nasdaq-listed company must have a policy in place governing the company’s recovery of erroneously awarded compensation. Also known as a clawback policy, this policy must meet the standards of the applicable national securities exchange. Our team wrote about the saga of this rulemaking earlier this year. We expect a high volume of board activity in this space in the fourth quarter.
December 15, 2023: Ugly Sweater Day
I will be observing this holiday, which occurs annually on the third Friday in December. Make my day and send me a photo of you in your ugly sweater: email@example.com.
December 18, 2023: New Item 1.05 appears in Form 8-K for cybersecurity incidents
Similar to other Form 8-K disclosure, a public company must report any material cybersecurity incident on Form 8-K within four business days of determining that it has experienced a material cybersecurity incident. Our team outlined the new SEC rule on cybersecurity disclosure this summer. Other key dates to keep in mind:
- December 15, 2023: Form 10-Ks for fiscal years ending on or after this date must include the new cybersecurity disclosure required by the rule
- June 15, 2024: Beginning of requirement for smaller reporting companies to report under new Item 1.05 on Form 8-K
December 31, 2023: Last date to notify NYSE of adoption of clawback policy
Any NYSE-listed company must confirm via Listing Manager that it has adopted a compliant clawback policy or that it qualifies for an exemption from adopting the policy. The NYSE issued an alert on this requirement this fall.
January 1, 2024: Beneficial ownership reporting to FinCEN begins
While public companies are exempt from the new requirement under the Corporate Transparency Act to report beneficial ownership to FinCEN (the Department of the Treasury’s Financial Crimes Enforcement Network), other companies will need to begin reporting their beneficial ownership. There are many exemptions, including an exemption for large operating businesses (operating presence in U.S.; filed U.S. income tax returns in the prior year showing more than $5 million in gross receipts or sales; and has more than 20 full-time employees). However, smaller private companies will likely need to start reporting and may find FinCEN’s Small Entity Compliance Guide helpful. Failure to report can result in fines that accrue daily or criminal penalties including imprisonment for up to two years.
January 1, 2024: New York LLCs: Beneficial ownership reporting to NYS begins
If signed by Governor Hochul, New York’s LLC Transparency Act will require newly formed limited liability companies (LLCs) to disclose the names of their beneficial owners at the time of formation or qualification to do business in New York. For each beneficial owner, New York LLCs will be required to include in their articles of organization (and foreign LLCs in their application for authority to do business: 1) full legal name; 2) date of birth; 3) current business street address; and 4) identifying number from a passport, driver’s license, or government-issued ID. For New York LLCs in existence before this date, the LLC must include this information any time it amends its articles of organization. My colleague Vittoria Buzzelli wrote an article about the LLC Transparency Act that covers its exemptions and connection to the Corporate Transparency Act. Governor Hochul has until December 31, 2023 to sign or veto the LLC Transparency Act. If not signed or vetoed before that date, it will automatically become law.