Mayer Brown analyzed 34 insider trading policies to understand how large financial institutions address the heightened insider trading risks they face relative to other public companies. We analyzed the insider trading policies of 24 publicly traded investment banks, nine publicly traded private equity sponsors and one publicly traded financial institution with substantial operations in both investment banking and private equity management (which institution we include in both the investment bank and private equity sponsor statistics herein). Since the nature of their business necessarily creates both frequent opportunity for insider trading (especially in other companies’ securities, including through “shadow trading”) and a large universe of employees with access to material non-public information, a survey of how these types of large financial institutions generally address such risks in their insider trading policies can be informative to financial institutions reviewing their existing policies.

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In what is developing into quite a busy time at the Securities and Exchange Commission, on February 11, 2026, the Staff of the Division of Corporation Finance (the “Division”) made updates and changes to the Division’s Compliance and Disclosure Interpretations (“CDIs”).  The new and revised CDIs are consistent with the Division’s current deregulatory position, as detailed below:

Securities Act Rules CDIsRevised/New Guidance
CDI 139.03 (Revised)Revised to state that a merger by Company A with a new holding company formed by Company A in another state would qualify for the change in domicile exception in Rule 145(a)(2), assuming that the only purpose of the transaction is to change Company A’s domicile within the United States.  This is a reversal of the Division’s prior position, where the addition of a holding company would have led to Rule 145(a)(2)’s exception being inapplicable to a redomiciliation transaction. Note that under the revised CDI, Rule 145(a)(2) would not be available if the transaction caused Company A’s organizational structure, business operations, or regulatory regime to change significantly, other than as a result of differences in applicable state law.
CDI 212.32 (New)An issuer filed a Form S-3ASR for a secondary offering under Rule 415(a)(1)(i), then lost its WKSI status and filed a post-effective amendment to convert the registration statement to a non-automatic shelf on Form S-3.  Although the offering was initially registered on Form S-3ASR and so would expire three years after effectiveness per Rule 415(a)(5), in its amended form, it no longer fits into any category listed in Rule 415(a)(5) and therefore will not expire.
CDI 212.33 (New)Securities registered on Form S-8 may not be carried forward to a new registration statement in reliance on Rule 415(a)(6) because Form S-8 offerings are made pursuant to Rule 415(a)(1)(ii), and such securities are not described in Rule 415(a)(5), and therefore Form S-8s do not expire. In other words, there is no need to carry these securities forward because the registration statement remains effective indefinitely, subject to other regulatory requirements.
CDI 212.34 (New)When an issuer carries forward unsold securities from an expiring registration statement pursuant to Rule 415(a)(6) and the replacement registration statement is declared effective, the issuer does not need to file a post-effective amendment to deregister the unsold securities from the prior registration statement.

Find the new CDIs here.

Securities and Exchange Commission Chair Paul Atkins testified before the House Financial Services Committee and the Senate Committee on Banking, Housing, and Urban Affairs last week, presenting a comprehensive overview and update of the SEC’s priorities and initiatives. Consistent with his various remarks since the start of his tenure, Atkins’ remarks centered on capital formation, public company disclosure reform, digital asset regulation, and regulatory cost reduction. In addition to his prepared remarks, Atkins engaged in a broad discussion regarding proxy advisers, electronic delivery of documents, and other issues. This blog post summarizes key discussions from Atkins’ two days of testimony.

Capital Formation and IPOs

Chair Atkins identified reinvigorating the U.S. public markets as a central priority.  He repeated a data point used in previous speeches: the number of exchange-listed companies has fallen by approximately 40% since the mid-1990s, from more than 7,800 to roughly 4,761 as of September 2025.  The Chair attributed this decline to decades of “regulatory creep” and outlined a three-pillar plan to “make IPOs great again.”  His plan focuses on (1) re-anchoring disclosures in materiality, (2) de-politicizing shareholder meetings by refocusing on significant corporate matters, and (3) providing public companies with litigation alternatives to protect innovators from frivolous suits while preserving remedies for investors harmed by fraud.  Atkins expressed support for bipartisan legislation relating to capital formation currently under consideration in Congress, including the INVEST Act and the Empowering Main Street in America Act.

Disclosure Reform

A major theme of the testimony was the need to modernize and streamline public company disclosure requirements.  Atkins observed that public companies collectively spend approximately $2.7 billion annually to prepare and file their annual reports—money not reinvested in their businesses.  He emphasized that the SEC is not seeking to “gut” corporate disclosure, which he described as vital, but rather to modernize, rationalize, and streamline reports.

Proxy Advisors

Recent debate regarding the influence of proxy advisory firms, specifically Institutional Shareholder Services and Glass, Lewis & Co., was also raised during the testimony.  The President and lawmakers have scrutinized the influence of proxy advisers.  The Chair acknowledged that the SEC is “definitely looking at this whole ecosystem” of corporate governance and shareholder proposals.  However, he called proxy advisers “a symptom of the underlying problem, and that’s the weaponization of shareholder proposals.”

Digital Asset Regulation

Atkins focused on the SEC’s approach to digital assets, endorsing congressional efforts to enact the CLARITY Act.  A federal framework is long overdue, he said, while emphasizing that no SEC action would be more effective than nonpartisan market structure legislation.  The SEC is working in coordination with the CFTC to ensure there are no gaps in oversight while providing market participants with certainty regarding jurisdictional authority as between the agencies.

Lawmakers also asked for updates on the Chair’s previously announced “innovation exemption” related to digital assets.  Atkins explained that the SEC plans to provide guidelines for stocks that trade on blockchains this year.  It is unclear whether the innovation exemption would follow the required notice and comment period for new regulation.  “Notice and comment is important,” he said, “but the innovation exemption… would be… cabined, time limited, transparent and really anchored in strong investor protection.”

Enforcement

The Chair stressed that the SEC would be returning its enforcement priorities to root out fraud and remedy investor harm.  Since he became Chair, the SEC has brought enforcement actions to address offering frauds, insider trading, accounting and financial frauds, and breaches of fiduciary duty by investment advisers.  

Consolidated Audit Trail

Atkins addressed the SEC’s review of the Consolidated Audit Trail (CAT), observing that as the agency modernizes oversight for digital assets, it must also reassess whether legacy tools for traditional markets remain appropriately aligned with regulatory need and the public interest.  He has directed SEC staff to conduct a comprehensive review of the CAT, covering governance, funding, potential cost-saving measures, scope, and security. The SEC has reduced originally-approved 2025 CAT operating costs by approximately $92 million, and additional CAT plan amendments would save approximately $7 million to $9 million annually.

Additional Updates

Throughout the hearings, Atkins indicated that the SEC is actively reviewing a number of additional matters, including the pending climate disclosure rule, an executive order on alternative investments in retirement accounts, Form PF reporting requirements for hedge funds, and efforts to reduce costs across the regulatory ecosystem.  On electronic delivery, the Chair confirmed that the Commission plans to write a rule allowing electronic delivery of financial documents as the default option for investors and that he has “instructed the staff to work on that.”

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While the Chair outlined an ambitious agenda, many of the initiatives remain in the early stages of review.  We will continue to provide updates.

The Financial Industry Regulatory Authority, Inc. (“FINRA”) issued Regulatory Notice 26-03 (the “Notice”) consolidating guidance on the use of negative consent letters for bulk transfers or assignments of customer accounts between FINRA members. Moreover, the Notice eliminates the current practice of submitting draft negative consent letters to FINRA staff for review; this change will become effective on April 1, 2026.  

Continue reading this Legal Update.

The Credit Roundtable, an association of fixed income investors, recently published a letter to the Securities and Exchange Commission (the “SEC”) expressing concern with potential changes to the SEC’s debt tender offer rules.  The Credit Roundtable explained the practical difficulty that the existing regulatory framework creates for institutional investors and proposed changes.

To understand the current framework for debt tender offers, it is best to think of three categories of debt tender offers:  standard offers, five-day offers and convertible bond offers.  Currently, all tender offers are subject to Regulation 14E.  Pursuant to 14e-1(a) under Regulation 14E, all tender offers (except for five-day offers, as explained below) must remain open for 20 business days.  In 2015, the SEC granted no-action relief for debt tender offers for “any and all” debt securities of a particular class that meet certain conditions to remain open for only five days, notwithstanding Rule 14e-1(a).  One of the conditions is the “Guaranteed Delivery Procedure Condition,” which requires the offeror to permit tenders by guaranteed delivery procedure prior to the offer’s expiration if the holder certifies that they beneficially own the tendered securities and that delivery thereof will be made no later than the close of business on the second business day following the offer’s expiration.  Finally, tender offers for convertible debt securities are subject to the additional rules that Rule 13e-4 imposes on tender offers for equity securities.

A number of trade groups and bar associations have provided comments on the tender rules.  The Credit Roundtable letter expresses concern that the SEC Staff might consider changes to the tender offer process that may shorten the time decisionmakers at institutional investors have to make an informed choice on whether to tender.  The letter explains that the decision-making period in a five-day offer is actually shorter than it seems. Generally, decisionmakers do not receive tender offer notifications until after DTC notifies the institution’s internal corporate actions team through the Automated Tender Offer Program (“ATOP”) and the corporate actions team notifies decisionmakers.  This process can take several days.  Custodians that hold debt securities for institutional investors often set deadlines that may be several days before the tender offer deadline or expiration date.  By the time a tender offer notification makes its way from the issuer to a decisionmaker, the decisionmaker may have as little as one business day to make a decision.  The letter expresses concern that shortening this time period or subjecting Standard Offers to a shorter timeline would undermine the SEC’s intent when it adopted the tender offer rules, i.e., to decrease the likelihood of “hasty, ill-considered decision making.”  To balance these concerns with the SEC’s interest in affording issuers of debt securities additional flexibility, the Credit Roundtable proposes one rule change to each category of debt tender offer:

  • Standard Offers:  Allow ten-business-day tender offers at a single price.  By way of background, standard offers generally include a ten-business-day “early tender period” during which tendering holders are paid an early tender premium.  The Roundtable argues that because settlement may not happen until after the full tender offer period ends, even though almost all tenders are effected during early tender periods, most tendered bonds “are effectively locked up for two additional weeks with no benefit to bondholders or the issuer.”  Permitting ten-business-day offering periods for standard offers would balance issuers’ interest in speed with holders’ need for time to review.
  • Five-Day Offers:  Eliminate the Guaranteed Delivery Procedure Condition so offerors need not worry about settlement uncertainty, a change the Roundtable believes is feasible thanks to “modern tender mechanics such as ATOP,” DTC’s Automated Tender Offer Program.
  • Convertible Bond Offers:  Create an exception from the equity tender offer rules for deep out-of-the-money convertible debt securities.  Since deeply-out-of-the-money convertible debt securities “function as debt securities,” the Roundtable argues for treating them like straight debt securities.

On January 23, 2026, the staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission issued a letter in which it stated it would not object if a large investment bank (the “Bank”) determines that it does not act “as a group” for purposes of Sections 13(d) and 13(g) under the Securities Exchange Act of 1934 with institutional investor counterparties by virtue of entering into certain over-the-counter derivative contracts in the ordinary course of business. 

Background

The Bank routinely enters into derivative contracts on equity securities with counterparties for reasons that “include hedging price, market and other economic risks, achieving indirect or synthetic exposure to particular assets or facilitating proprietary or customer-facing trading activities.”  The Bank expressly retains sole discretion over its related hedging activity, and a counterparty has no right to control any hedging activity or influence the voting or disposition of any securities the Bank may acquire.  

Analysis Regarding Section 13(d) and Section 13(g) Groups

The Exchange Act mandates that any “person” who acquires beneficial ownership of more than 5% of a class of registered equity securities must report such ownership to the SEC.  In addition, when two or more persons act together for the purpose of “acquiring, holding, or disposing” of securities of an issuer, such “group” shall be a single “person,” and must jointly report beneficial ownership.

The Staff’s position, and accompanying analysis, is consistent with how it has historically approached the question of whether a “group” exists for these purposes.  Specifically, the SEC has focused on whether parties are working together toward a common purpose and facts that may suggest the same. As discussed in greater detail in the letter, the Bank’s independence, including with respect to its hedging activities, remain key factors to avoid classification as a “group” with a counterparty.

Implications for Market Participants

The Staff’s guidance is helpful to market participants.  In particular, the guidance is likely to ease concerns with respect to counterparties that may hold (or acquire) beneficial ownership in excess of the 10% threshold during the duration of a contract, including Section 16 reporting and short-swing profit rules.

Read the letter here.

In recent remarks, Commissioner Uyeda provided an update on the Securities and Exchange Commission’s progress toward implementation of the Treasury clearing rule.  The Commissioner emphasized the benefits associated with central clearing, which include enhancing transparency and reducing bilateral exposures.  In his remarks, he cites research from the Office of Financial Research on the benefits of central clearing in the Treasury repo market.  Based on a back testing analysis of repo and reverse repo positions of six G-SIBs during the first eight months of 2025, the OFR found that had the Treasury clearing rule been in effect, each bank would have freed up an average of approximately $34.5 billion in balance sheet capacity.

The Commissioner noted that CME’s and ICE’s registrations as clearing agencies for Treasury securities transactions have been approved.  The SEC Staff also has been reviewing and considering proposals from FICC to support the rule—related to expanded cross-margining for customers.  The Commissioner explained that in December 2025 the SEC had acted on two proposals from FICC to establish a “collateral-in-lieu” service as part of its existing sponsored general collateral service.  This would allow FICC to take a lien on the collateral underlying a repo instead of charging margin, addressing the double margining issue.  The SEC also issued an order approving expansion of FICC’s agent clearing service to include triparty transactions.

The Commissioner acknowledged market participants are seeking additional regulatory clarity relating to the application of the rule to inter-affiliate transactions.  The final rule included an exemption for inter-affiliate transactions. The inter-affiliate exemption provides that a direct participant of a central counterparty would not have to clear its inter-affiliate transactions if (i) the affiliate was under common control and was either a bank, broker-dealer or a futures commission merchant, and (ii) the direct participant also submitted for clearing the outward-facing transactions of that affiliate.  However, this final inter-affiliate exemption was not exposed to public review, and market participants have raised a number of concerns, including with respect to the types of entities that can be affiliates for purposes of the exemption and the requirement to clear the outward-facing transactions of the affiliate.  SEC staff has been working with market participants to better understand these concerns and how they can be addressed.  The Commissioner noted that “productive feedback” had been received from market participants and it was his hope that potential modifications could be rolled out in the near future.

The Commissioner also touched on the rule’s extraterritorial scope—a topic he has commented on in various prior speeches.  He noted that the SEC is working with non-U.S. firms and understands that these firms may have a more significant compliance burden.  Finally, he said that the Staff was working to understand the jurisdictional issues, and hoped to address these matters.  Read Commissioner Uyeda’s full remarks.

Webinar | February 12, 2026
9:00 a.m. – 10:00 a.m. ET
Register here.

We will look at the key items to consider when working on sovereign capital markets transactions. How do documentation standards, governing law, and listing/clearing choices affect execution?  What is the latest thinking about “collective action clauses”?  What happens when things go wrong, including acceleration, cross default and restructuring pathways?  What are the key elements of an effective immunity waiver clause?

We will discuss these concepts, and many others, in practical terms.

We will also cover novel techniques and trends our team has been advising on at Mayer Brown, including bespoke liability management exercises such as switch tender offers, debt-for-impact transactions, and considerations for sovereign sukuk issuers.

Webinar | Register here
12:00 a.m. – 12:40 a.m. EST

Join us for our defined outcome products series.  Defined outcome products include a range of products designed to provide investors with some level of certainty (a “predictable” outcome if held for the specified period) usually based on a buffer, while providing equity market exposure.  In recent periods, defined outcome ETFs have experienced particularly notable growth.

Each session will be 30 to 40 minutes in length.  CLE credit will not be available for these sessions.

Tuesday, February 10, 2026 – Comparing the tax treatment to investors of structured products, ETNs, UITs, and ETFs

Tuesday, March 3, 2026 – Tax structuring issues for entities taxed as registered investment companies (RICs, UITs and ETFs)

Tuesday, March 24, 2026 – Understanding the regulation of SMAs

Tuesday, April 14, 2026 – Comparing disclosure and other requirements applicable to ETFs with those applicable to structured notes and ETNs

Tuesday, May 5, 2026 – Considerations for index providers to, or hedge providers to, ETFs

Webinar | February 4, 2026
10:00 a.m. – 11:00 a.m. EST
Register here.

Mayer Brown has a long history in short-term paper.  Join this webinar as we discuss some key trends and innovations we expect to affect the short-term debt markets over the next 12-24 months.

Topics include:

  • An overview of the regulatory framework and recent regulatory developments relevant to ABCP in the US, EU and UK
  • New use cases for ABCP and Structured CP;
  • ECP bolt-ons for ABCP – what is required to access the ECP market;
  • CP in the Middle East and Islamic Structures; and
  • Tokenization of CP and ABCP.