The Securities and Exchange Commission proposed – by a 3-1 vote – a comprehensive new set of rules (the “proposals”) in an effort to enhance and standardize the climate-related disclosures provided by public companies. According to SEC Chair Gary Gensler, the proposals come in the wake of increasing investor demand for more
New IRS Revenue Ruling Provides Opportunities for Financing Carbon Capture Equipment
On July 1, 2021, the Internal Revenue Service published Revenue Ruling 2021-13, which provides guidance on three important issues related to the income tax credit for carbon oxide sequestration found in section 45Q of the Internal Revenue Code. Recall that section 45Q provides for a credit against a taxpayer’s income tax liability based on the amount of carbon oxide (a) captured using carbon capture equipment, (b) placed in service at a qualified facility and (c) disposed of, injected, or utilized in a specified manner. For more information on carbon capture and section 45Q tax credits, see here, here and here.
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FinCEN Seeking Comments on New Beneficial Owner Reporting Requirements
On April 5, 2021, the Financial Crimes Enforcement Network (“FinCEN”) released its advance notice of proposed rulemaking (“ANPRM”) to solicit public comments on questions pertinent to its implementation of the Corporate Transparency Act’s (“CTA”) beneficial owner reporting requirements. As discussed in a previous Energy Law Blog post, the CTA was adopted as part of the 2021 National Defense Authorization Act and requires that certain business entities disclose to FinCEN the identities of their beneficial owners and applicants. The information will then be stored in a secure, private database that may be accessed by, among others, law enforcement agencies for crime prevention and certain financial institutions for customer due diligence purposes. FinCEN has until January 1, 2022, to implement the regulations regarding reporting requirements, although FinCEN is also using this ANPRM to solicit comments on the implementation of the related database maintenance use and disclosure provisions. Final rules on customer due diligence requirements for financial institutions will be the subject of separate rulemaking and comment periods.
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Congress Passes the Corporate Transparency Act to Require Beneficial Ownership Disclosure
The Corporate Transparency Act, adopted as part of the 2021 National Defense Authorization Act (the “Act”), will require certain business entities (defined as “reporting companies”) to disclose to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) the identities of their beneficial owners and applicants. FinCEN will use these disclosures to create a…
SEC Expands Investor Classes for Unregistered Securities Transactions
Yesterday the U.S. Securities and Exchange Commission adopted final rules that amend the definitions of “accredited investor” and “qualified institutional buyer” which are central to classifying investors that may participate in private offerings and investments under federal securities laws.
A company wishing to offer or sell securities to the public must register those securities with the SEC unless an exemption from registration is available under federal securities laws. The registration process is intended to protect investors by providing regulatory oversight and requiring the public disclosure of key information about the offered securities, but it is often lengthy and costly. As an alternative, many companies seek to raise capital with unregistered securities pursuant to an available exemption.
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Main Street Lending Programs
In addition to the SBA’s Payment Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), on April 9, 2020, the Federal Reserve announced that it was going to provide up to $2.3 trillion in loans to support the economy through various programs, including the Main Street Lending Program (“MSLP”). The MSLP will support credit flow to small and mid-sized businesses by providing support to businesses that were in good financial standing prior to the COVID-19 crisis. This is a new loan program authorized by the CARES Act. We will continue to update this summary as more information becomes available.
Emerging on the Other Side of the Coronavirus Pandemic: Raising Structured Capital for Small and Mid-Size Businesses
The Coronavirus Pandemic has wreaked havoc on small and mid-sized businesses (“SMBs”) throughout Texas and the rest of our country. Many SMBs have had to close their doors due to mandatory stay-at-home orders and other social distancing orders and requirements. The CARES Act and other recent legislation passed by Congress and signed into law by President Trump contain several programs designed to assist these businesses in their efforts to make it through the hardships of the next several months. But what about the longer-term capital needs for SMBs as the pandemic subsides and these businesses emerge from the mandatory stay-at-home and other orders and begin to move forward again?…
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SEC Gives Advisers Additional COVID-19 Regulatory Relief
The SEC announced on March 25, 2020 additional regulatory relief for investment advisers impacted by the Coronavirus. The SEC extended relief from May 15 until June 30, 2020 for filing an amendment to Form ADV Part 1A and the Brochure (ADV Part 2A) and related delivery obligations. https://www.sec.gov/rules/other/2020/ia-5469.pdf. The annual amendments for ADV are normally due March 30, 2020 for most firms. The SEC originally extended these deadlines in an order issued March 13, 2020. In the new order, the SEC also relaxed the requirements for qualifying for the extension. Under the new rule, the adviser no longer has to give an estimated date of compliance or to explain the circumstances of the delay.…
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Delaware Corporations Can Rely On Federal Forum Provisions for ’33 Act Claims
Delaware corporations routinely include “exclusive federal forum” provisions in their charters and bylaws to designate federal courts as the exclusive forum for litigating claims under the Securities Act of 1933 (the “’33 Act”). Corporations generally prefer to litigate these claims in federal court as state court is viewed as inefficient and more inclined to grant plaintiffs a summary judgment ruling. The practice of adopting exclusive forum provisions is intended to avoid state court litigation of ’33 Act claims and state court forum shopping by plaintiffs.
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SEC Gives Advisers COVID-19 Regulatory Relief
The SEC announced on March 13, 2020 that investment advisers affected by Coronavirus are exempted from filing an amendment to Form ADV Part 1A and the Brochure (ADV Part 2A) for up to 45 days. https://www.sec.gov/rules/other/2020/ia-5463.pdf. The annual amendments for ADV are due March 30, 2020 for most firms. In addition, the SEC exempted advisers affected by Coronavirus from the requirements to deliver amended brochures, brochure supplements or summary of material changes to clients where the disclosures are not able to be timely delivered because of circumstances related to Coronavirus.
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