Mayer Brown Free Writings + Perspectives

SEC Division of Corporation Finance Acting Director John Coates participated in a fireside chat on April 7, 2021 during the annual Global Capital Markets & the US Securities Laws program hosted by the Practicing Law Institute (PLI).

Acting Director Coates, when asked about his priorities at the SEC, mentioned three items: the “unprecedented surge” in special purpose acquisition company (SPAC) filings, reporting company ESG disclosures (including disclosure of climate change and potentially political spending), and improvement of the proxy voting system (commonly referred to as “proxy plumbing”).

With respect to ESG issues on a global scale, Acting Director Coates provided insight into the International Organization of Securities Commissions’ recent statement announcing the creation of a Technical Expert Group co-led by the SEC to undertake an assessment of the recommendations to be developed as part of the IFRS Foundation’s sustainability project. He explained that, while the outcome of the assessment remains to be seen, it is his hope that this project will result in a consistent, harmonized global standard for ESG disclosure.

Acting Director Coates also addressed the SEC’s interim final rules implementing the Holding Foreign Companies Accountable Act, highlighting the fact that the SEC will need to wait for the Public Company Accounting Oversight Board to put a process in place to identify jurisdictions in which authorities restrict the ability for audit firms to comply with US requirements. He also stated that there would likely be no disclosure required from reporting companies to the SEC until 2023.

In closing, Acting Director Coates returned to the topic of SPACs, warning the audience to “be careful what you wish for” and noting that there may be significant issues that have yet to be discovered.

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