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SEC Staff Updates Guidance on Disclosure of Non-GAAP Financial Measures

On December 13, 2022, the staff of the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) updated its guidance on registrants’ disclosure of non GAAP financial measures (“non-GAAP measures”) – numerical measures of a registrant’s historical or future financial performance, financial position or cash flows that exclude amounts included in, or include amounts excluded from, the most directly comparable measure calculated under the generally accepted accounting principles (“GAAP”) used in preparing the registrant’s financial statements.

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SEC Extends Rule 15c2-11 Relief – Delaying the Date by which Rule 144A Issuers may be Required to Publicly Disseminate Financial Statements – until January 2025.


Time to Read: 1 minutes Practices: Capital Markets

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As discussed in our prior Alert, in September 2020, the SEC amended Rule 15c2-11, which governs when dealers can publish quotations for securities to, among other things, generally prohibit broker-dealers from publishing quotations for an issuer’s securities in a quotation medium when current information about the issuer is not publicly available. In 2021, the SEC staff clarified that they interpreted Rule 15c2-11 to apply to fixed-income securities as well as equity securities and granted time-limited relief through January 4, 2023 from the public information requirement for fixed-income securities offered pursuant to Rule 144A.

On November 30, 2022, the SEC staff issued a no-action letter extending that relief until January 4, 2025. This extension is important for both issuers of and investors in Rule 144A fixed-income securities as well as broker-dealers who provide quotes for these securities.

In the no-action letter granting the extension, the SEC staff reiterated its view that Rule 15c2‑11 applies to fixed-income securities as well as equity securities. As a result, it remains to be seen how the industry will respond to address the time-limited nature of this relief. We expect that there may continue to be an increased focus on reporting covenants for Rule 144A fixed-income securities as well as continued advocacy efforts with the SEC regarding the application of Rule 15c2-11 to fixed-income securities.

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If you would like to follow up regarding any of the matters covered by this Alert, please contact your usual Ropes & Gray attorney.

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