– Amend the registration and annual reporting requirements for transfer agents, including the questions and instructions on Forms TA-1 and TA-2.

– Modernize the rules to reflect how transfer agents carry out their activities in light of technological advancements, including the use of electronic and blockchain-based recordkeeping and uncertificated securities.

– Establish new requirements related to turnaround, risk management, and inactive securityholders.

– Introduce two new rules addressing compliance and restrictive legends for registered transfer agents.

The proposed rule addressing restrictive legends is likely to be the most interesting part of the proposal for securities lawyers. The rule would require transfer agents to establish a reasonable basis for removing restrictive legends on a security, and would also create a safe harbor for establishing the existence of such a reasonable basis. Fitting into that safe harbor is where things get interesting.

The proposal offers two potential routes to that safe harbor (see the discussion beginning on p. 206 of the Proposing Release). One would permit the transfer agent to rely on its own efforts, but that would require the transfer agent to jump through several documentation and due diligence hoops. The second alternative would allow the transfer agent to rely on an opinion of counsel, but that opinion must be rendered by “counsel who is not an affiliate, officer, director, or employee of either the issuer or the individual or entity seeking to resell shares of the issuer.”

That language suggests that a transfer agent couldn’t fit into the safe harbor by relying on an opinion from the issuer’s in-house counsel. While I think it’s more typical for outside counsel to render these opinions, I know some public companies look to their in-house team to handle them. I also know that there have been some enforcement actions against lawyers who’ve rendered questionable legend release opinions, but I’m not aware of any involving in-house counsel, and this seems like overkill to me.

In either case, the transfer agent must also not be aware of any “red flags” with respect to the transaction for the safe harbor to apply. Examples of potential red flags are set forth on p. 205 of the Proposing Release. While some are clearly problematic (e.g., incomplete or non-existent issuer SEC filings, inconsistent financial information and altered charter documents), others seem less clear-cut (e.g., issuers with several business combinations or large reverse stock splits) and, without further clarification, may invite skittish transfer agents to see ghosts.

– John Jenkins

For EY, the turnaround was the “direct result” of a $1 billion investment in technology and talent to “increase audit quality, including expanded use of AI and advanced analytics, continuous learning, and shifting work so teams focus on the areas requiring the highest levels of judgment and insight,” the firm said in an emailed statement.

The technology changes focused heavily on standardizing and simplifying the audit process globally, [EY Americas CTO Richard] Jackson said.

EY also worked to eliminate unnecessary audit steps and concentrate more closely on procedures tied to key risks, while investing in employee training and compensation.

Interestingly, the article says that the inspection results don’t reflect additional investments in generative and agentic AI tools that the firm introduced this year.

It’s also worth noting that the inspection report showed significant drops in the deficiency rates among the other Big Four firms. KPMG’s deficiency rate dropped from 20% to 13%, PwC’s dropped from 16% to 9%, and Deloitte’s dropped from 14% to 9%. The article doesn’t mention the extent to which tech and AI investments played a role in the other firms’ improved results, but it’s hard to imagine they didn’t.

– John Jenkins

This note provides an overview of important FINRA and SEC rules that companies and underwriters should consider in connection with US initial public offerings (IPOs) of equity securities. The discussion regarding FINRA rules focuses on four related areas: the Corporate Financing Rule (Rule 5110), which regulates underwriting terms and compensation; the Conflict of Interest Rule (Rule 5121), which regulates offerings of securities that are subject to a conflict of interest; and the two IPO Allocation Rules: the New Issue Rule (Rule 5130) and the IPO Allocation Rule (Rule 5131). The note also highlights the recent amendments to Rule 5110 that were recently approved by the SEC in 2026, and their potential implications for IPO planning and execution.

The memo also discusses the SEC’s registered offering reform proposal and its implications for the IPO process.

– John Jenkins

– In both the UK and Continental Europe, clear attribution of cybersecurity oversight has become standard practice, disclosed by over nine in ten large cap companies.

– Board oversight of AI is less established but is catching up quickly, present at around seven in ten large cap companies in Europe – a significant increase from the previous year.

– More than half of Continental European large caps have an AI policy in place, up from around one in five in 2025. Over four in ten UK companies have done the same.

– In the U.S., board oversight of cybersecurity issues is similarly well established among Russell 1000 companies with AGMs through June 2026, disclosed by nearly nine in ten and largely consistent with 2025.

– AI policies remain less prevalent but appear to be rising, with approximately 21% of Russell 1000 companies with AGMs through June 2026 having an AI policy in place, an increase from around 15% in 2025.

In addition to addressing cyber and AI oversight activities, the report discusses shareholder voting trends in board elections, and trends in board gender and ethnic diversity.

– John Jenkins

Do we have the right structure to oversee technology? Technology committees are on the rise. Now 17% of S&P 500 boards have one, up from 15% in 2022 and 10% in 2018. That doesn’t mean standing up a technology committee is the right choice for every board. In fact, most companies have expanded the purview of existing committees — usually the audit committee — to oversee technology matters like AI and cybersecurity.

While nominating and governance committees weigh various factors selecting the committee structure and responsibilities that work best for their board, one reality cuts across all models: with AI transforming business, effectively overseeing technology’s impact on strategy and risk and communicating that oversight approach to stakeholders is a growing imperative.

How are we building and communicating our board’s AI acumen?  One theme from our conversations with investors is that they want a clearer view into how boards are executing oversight of AI and technology more broadly. That includes how boards are gaining the skills and experiences needed to oversee AI strategy and risks. More companies are responding by highlighting the relevant experience of board members. This season, 37% of S&P 500 companies cited AI experience for at least one director, up from 11% in 2022. Overall, the percentage of S&P 500 directors with AI experience cited in the proxy has increased from 1% in 2022 to 5% in 2026.

But effective oversight depends on more than tech credentials, especially with how fast technology is changing. Board members should also consider how disclosures reflect the ongoing education, training and independent external perspectives they’re securing to build the full board’s AI acumen and keep pace with new developments.

Are our disclosures fit for AI-enabled stewardship? Investors are increasingly using AI tools to review disclosures, compare companies and inform voting decisions (though not to make voting decisions, yet). That means companies must adapt their disclosures with both human and machine readers in mind and prepare for a new depth of questions from investors in engagement.

Important information should not be buried in formats that AI tools struggle (for now) to interpret, and companies should recognize that investors can now analyze filings with a level of rigor at a scale that was previously impossible. As one investor told us: “there is no hiding in the footnotes anymore.”

AI is also enabling investors to scrape and assess vast amounts of unstructured data, from skills in job postings to employee reviews, and compare that external picture against company disclosures. As a result, it is more important than ever that companies understand the narrative AI may construct and make sure it aligns with the narrative they intend to tell.nbsp;

Other questions identified by the article relate to more traditional topics, such as changes in the company’s approach to shareholder proposals, identifying vulnerable directors, ensuring that the company’s engagement approach reflects current realities, and what proxy voting results don’t tell boards about investor views on executive pay.

The article says that this year’s relatively calm proxy season masked the extent to which ongoing regulatory, legal and technological changes are making it more difficult for boards and management to assess investor views and priorities, thus leaving them less prepared to deal with surprise vote outcomes and shareholder activism.

– John Jenkins

The MOU establishes a framework for the agencies to enhance cooperation in their regulatory and enforcement responsibilities in order to improve market oversight and compliance. Among other things, the MOU includes information-sharing protocols to facilitate the exchange of information between the SEC and FDA that is relevant to both agencies’ important missions.

“FDA-related disclosures by public companies have a significant impact on our markets,” said SEC Chairman Paul S. Atkins. “The FDA is a valuable partner in our efforts to administer and enforce applicable disclosure requirements under the federal securities laws, and I look forward to further strengthening our partnership through the MOU.”

The MOU will remain in effect for three years and may be extended by the agencies.

– John Jenkins

The first proposal is currently titled “Shareholder Proposal Modernization,” but in case you’re wondering what the SEC intends to do with shareholder proposals, the dashboard includes the following statement: “we request the title appear on reginfo.gov as “Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4.” Yeah, I think we can pretty much count on participants in the shareholder proposal industry moving immediately to DEFCON 2 on this news.

The second proposal to hit OIRA’s website on Friday is currently titled “Amendments to Certain Proxy Rules.”  The dashboard says that SEC also wants to change the title of this proposal to “Proxy Solicitation Modernization,” and its description says that Corp Fin is considering asking the Commission to “propose amendments to modernize certain rules regarding the proxy solicitation process, including certain filing and procedural requirements relating to proxy solicitations and shareholder meetings, to reduce costs and compliance burdens.”

Like the executive comp proposal, these two proposals appeared on the latest edition of the SEC’s Reg Flex Agenda and targeted an October 2026 date for their release. It looks like the SEC’s on track to hit that date, and we’ll be ready to address any proposals that are issued during our Proxy Disclosure and Executive Compensation Conferences to be held on October 12th and 13th in Orlando. In case you needed another reason to register now, I think the SEC just gave you three!

I also want to give a tip of the hat to all of the members who took time out from their weekends to reach out to us to make sure we were aware that these proposals had been posted to the OIRA site. Much appreciated!

– John Jenkins

A prolonged vacancy can fragment responsibility for connecting earlier concerns, unanswered questions, management commitments, and recurring warning signs. The formal process may continue to look orderly while the company’s ability to demonstrate effective board oversight gradually weakens.

A vacancy does not create director liability, and temporary coverage can work perfectly well. The issue is whether the interim arrangement preserves not only the administration of governance, but also the continuity, authority, and follow-through that allow directors to understand emerging problems and show how they responded.

The blog goes on to highlight some specific risks, including the loss of prior work that provides context to current information provided to directors, the inability to continue to see connections between various oversight problems, and the false comfort about the continuity of oversight that may be provided by the continuation of an orderly process. It points out that when there is a failure of oversight, the board’s actions – and failures to act – are viewed with the benefit of hindsight.

The blog also discusses the questions that boards should ask when a governance vacancy becomes prolonged in order to avoid potential discontinuities in the oversight function.

– John Jenkins

On August 19, 2026, U.S. Customs and Border Protection (CBP) published a General Notice announcing the agency intends to take action against importers (or their customs brokers) who have provided inaccurate Importer of Record (IOR) information on file with CBP. The publication of this notice signifies that CBP is moving swiftly to implement the June 3, 2026, Executive Order (EO) 14411, “Strengthening Customs Enforcement.”

In order to obtain an IOR number and begin importing goods into the United States, individuals or entities (or a customs broker acting on behalf of an individual or entity) must provide identifying information, including a physical address, an email address, a phone number and a tax identification number on CBP Form 5106.

According to the notice, all information on CBP Form 5106 MUST be accurate, complete and belong directly to the IOR.

The memo notes that CBP is starting to verify the accuracy of IOR information on file and highlights the potential consequences of non-compliance. These may include enforcement actions under the False Claims Act. The memo also says that company’s shouldn’t expect leniency for errors in an importer’s IOR profile due to outdated information or clerical errors.

– John Jenkins

On August 26, 2026, the SEC submitted a rule proposal titled “Executive Compensation Disclosure Reform” to the White House’s Office of Information and Regulatory Affairs (OIRA). Those SEC rulemaking initiatives that are under review by OIRA are listed on a dashboard until the review is completed.

The SEC signaled that it was considering potential changes to the executive compensation disclosure rules by announcing a roundtable on executive compensation disclosure requirements on May 16, 2025. The roundtable was held on June 26, 2025, and the SEC also solicited comments on potential changes to the disclosure requirements. The agenda for the roundtable called for three panels to discuss the evolution of executive compensation disclosure over time and to explore whether the rules have achieved their policy objectives, the challenges in preparing the required disclosure, the types of disclosure that investors find material, and what the disclosure requirements should look like in the future.

A consistent theme throughout the roundtable was the complexity of the compensation tables and the required methodologies for reporting the required information. During the roundtable, the panelists addressed the concept of materiality, including whether executive compensation information is material to investors. Some of the panelists at the roundtable advocated for a move to principles-based disclosure requirements, while others indicated certain prescriptive disclosure requirements may be necessary. The panelists discussed the challenges with perquisites, including the need to disclose personal security for executives as a perquisite. Several panelists noted the significant difficulties that companies encounter with the executive compensation requirements adopted pursuant to the Dodd-Frank Act, including the pay versus performance disclosure requirements, the mandatory clawback requirements and the CEO pay ratio disclosure requirements. Approximately 70 substantive comment letters and over 1,000 form comment letters were submitted in response to the SEC’s solicitation of comment.

While OIRA has up to 90 days to review an agency’s rulemaking, it has typically approved most SEC proposals in a much shorter period of time. Once the rulemaking has been cleared by OIRA, the Commission could schedule or an open meeting to vote on the proposal or approve it by a seriatim process without the need for an open meeting.

With this submission, it is certainly shaping up to be an interesting September!

– Dave Lynn