Chair Atkins Advocates a Reassessment of Regulation S-K Disclosure Requirements

On January 13, 2026, Chair Atkins issued a statement that Regulation S-K has expanded dramatically since 1982 and now often compels both material and “undisputably immaterial” disclosure—risking an “avalanche” of information that can obscure what a reasonable investor would find important and thereby undermine investor protection and capital formation.

Chair Atkins directed the Division of Corporation Finance to conduct a comprehensive review of Regulation S-K. He described the review as already underway, referencing prior public engagement on Item 402 executive compensation requirements and indicating that the next phase would turn to other Regulation S-K requirements. Chair Atkins also invited public input on how to recalibrate Regulation S-K toward material disclosure and set an April 13, 2026 comment deadline.

For more information, see Chair Atkins’ statement on reforming Regulation S-K.

 

Division of Corporation Finance Updates Securities Act and Proxy C&DIs

On January 23, 2026, the SEC’s Division of Corporation Finance issued a set of revisions, withdrawals and additions to its Compliance and Disclosure Interpretations (“C&DIs”) under the Securities Act and the Exchange Act proxy and tender offer rules. Taken together, the updates represent a significant modernization effort, aligning staff guidance with regulatory changes adopted over the past several years and addressing recurring interpretive questions raised by market participants.

Highlights include revisions to:

• Securities Act and Tender Offer Guidance. Several of the most significant changes relate to Securities Act Section 5 and the tender offer rules. The Division revised existing interpretations concerning pre-filing conduct in business combination transactions to describe circumstances in which the SEC staff would not object to the execution of lock-up agreements or agreements to tender prior to the filing of a Form S-4 or Form F-4, reflecting a more nuanced approach to when such agreements, if narrowly structured, do not raise impermissible gun-jumping concerns (see redlines to Questions 139.29, 139.30 and 239.13).

• Proxy Rules and Solicitation Mechanics. The Division also updated its Proxy Rules and Schedules 14A/14C C&DIs, clarifying that it will object to voluntary submissions of Notices of Exempt Solicitation that are not required by the rules and appear primarily intended to generate publicity, and removing legacy references to such voluntary filings (see redlines to Questions 126.06 and 126.07). In addition, the Division stated that it will not object if a company conducts a broker search fewer than 20 business days before the record date, provided that (i) the company reasonably believes proxy materials will still be disseminated to beneficial owners in a timely manner and (ii) the company otherwise complies with Rule 14a‑13 of the Exchange Act (see Question 133.02).

Viewed collectively, the January 23, 2026 C&DI updates signal increased comfort with well-defined pre-filing arrangements in business combination transactions and a more pragmatic approach to proxy solicitation mechanics, while discouraging practices viewed as inconsistent with the purpose of the proxy rules.

For more information, see the updated SEC C&DIs.

 

Beneficial Ownership Reporting Requirements for Insiders of FPIs Begins March 18, 2026

As a result of passage of the National Defense Authorization Act for Fiscal Year 2026 (“NDAA”), beginning March 18, 2026, directors and officers of FPIs with equity securities registered under the Exchange Act, will be subject to the insider reporting requirements of Section 16(a) of the Exchange Act. Section 16(a) requires reporting with the SEC of ownership of, and transactions in, equity securities registered under the Exchange Act. The amendments to Section 16(a) serve to eliminate an exemption that FPIs had previously been afforded, as compared to domestic issuers. However, greater than 10% shareholders of FPIs will continue to be exempt from Section 16(a), and the short-swing profit recovery provisions of Section 16(b) and the prohibitions on short sales of Section 16(c) will also not apply to insiders of FPIs. While the NDAA granted the SEC with authority to provide exemptions from Section 16(a) if the laws of a foreign jurisdiction impose “substantially similar requirements,” it is unclear whether and when any such exemptions will be provided.

Section 16(a) requires reporting of an insider’s “pecuniary interest” in the issuer’s registered equity securities, as well as derivative securities that are convertible or exercisable into, or otherwise derive their value from, the class of registered securities (e.g., warrants, options, restricted stock units). Reportable interests include both direct ownership of securities and certain forms of indirect ownership, such as through trusts, partnerships or corporations or holdings by certain immediate family members. Initial ownership reports are filed on Form 3, which are due on March 18, 2026 for directors and officers of FPIs on such date (thereafter, a Form 3 is due within 10 days of the effective date of appointment). All transactions involving the issuer’s equity securities and related derivatives are reportable on Form 4 within two business days of the transaction date, subject to certain limited exceptions. Transactions eligible for deferred reporting or inadvertently missed are reportable on Form 5 within 45 days after the issuer’s fiscal year-end.

Given the potential liability involved with noncompliance, and technical nature of Section 16(a) reporting, FPIs and their directors and officers are advised to begin preparing now for the initial filings due on March 18, 2026. This includes identifying which members of management qualify as “officers” for Section 16 purposes, gathering existing or applying for new EDGAR access credentials necessary for making filings, collecting both direct and indirect reportable interests of subject individuals, and establishing or enhancing internal controls and procedures to ensure timely reporting of equity compensation awards and other transactions.

For more information, see Debevoise In Depth and please join our webinar on Thursday, February 12, 2026 at 9:30AM ET/2:30PM GMT.

 

Delaware Supreme Court Reverses Court of Chancery’s Ruling in Moelis

On January 20, 2026, the Delaware Supreme Court reversed the Delaware Court of Chancery’s judgment in W. Palm Beach Firefighters’ Pension Fund v. Moelis & Co. (Feb. 22, 2024) (“Moelis”), finding that the plaintiff’s challenge to the stockholder agreement between Moelis & Company and Ken Moelis was time-barred under the equitable doctrine of laches because the plaintiff filed its complaint nearly 10 years after the signing of the stockholder agreement. Because the Supreme Court ruled on the basis of timeliness, it did not address whether the stockholder agreement provisions were facially valid. The Supreme Court also avoided substantively addressing the amendment to Section 122 of the DGCL that was enacted in response to the Court of Chancery’s decision because the amendment carved out then-pending litigation.

In Moelis, the Court of Chancery held that certain provisions of the stockholder agreement granting the stockholder approval rights over key corporate actions were void as an unauthorized delegation of the board’s managerial powers under DGCL Section 141(a).

In reversing, the Supreme Court held that the challenged stockholder agreement provisions were merely “voidable,” rather than void because the company could have implemented substantially the same arrangements through its certificate of incorporation or other authorized mechanisms. In other words, the provisions were not beyond the corporation’s power altogether. As a result, the plaintiff’s claim that the provisions were invalid was subject to equitable defenses, including laches.

The plaintiff had knowledge of the challenged provisions in 2014, delayed unreasonably in asserting its claims, and Moelis would be prejudiced by having to defend a long-standing governance arrangement years after it was adopted and relied upon. The Supreme Court therefore reversed the Court of Chancery’s judgment and vacated its orders.

On July 17, 2024, the governor of Delaware signed into law an amendment to Section 122 of the DGCL expressly allowing corporations to enter into the types of stockholder contracts that the Court of Chancery struck down, if the provisions are not contrary to the certificate of incorporation or would not violate Delaware law if included in the charter. The amendment, effective August 1, 2024, applies retroactively to all contracts, whether entered into prior to the effective date, with the important exception of agreements—such as that at issue in Moelis—subject to pending litigation.

For more information, see Debevoise Debrief.

 

Third Circuit Confirms Limits of the Best Price Rule

On February 3, 2026, the U.S. Court of Appeals for the Third Circuit issued a decision in Abramowski v. Nuvei Corp., holding that the “Best Price Rule”—a tender offer rule intended to prevent differential treatment among similarly situated security holders—does not require an offeror to purchase tendered shares it cannot lawfully acquire under the terms of the tender offer or applicable private agreements. Rules 14d-10 and 13e-4(f)(8) under the Exchange Act are referred to as the “Best Price Rule,” which requires that the consideration paid to any security holder for securities purchased pursuant to the tender offer be at least equal to the highest consideration paid to any other security holder for securities purchased in the tender offer.

In Nuvei Corporation’s (“Nuvei”) $9.75-per-share acquisition of Paya Holdings, Inc. structured as a two-step merger under DGCL Section 251(h), the tender offer required that shares tendered be freely transferable and outstanding at the time of acceptance. The plaintiffs subsequently attempted to tender earnout shares subject to transfer restrictions and forfeiture provisions, and Nuvei rejected the tender.

The Third Circuit affirmed dismissal, holding that the Best Price Rule applies only to shares that are actually “taken up and paid for” in a tender offer and does not require an offeror to purchase shares it cannot lawfully acquire; “[b]ecause federal law is silent … it is governed by the parties’ private agreements formed under state law.”

The decision provides certainty that in a properly structured tender offer, the Best Price Rule will not apply to securities subject to transfer restrictions governed by prior private agreements.

For more information, see Debevoise Debrief.

 

Regulatory Staff Articulate Frameworks for Tokenized Securities Structures

On January 28, 2026, the staff of the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement outlining their current taxonomy for tokenized securities—traditional securities that are represented in token form, where blockchain-style technology is used for some part of issuance, ownership tracking or transfer—under the federal securities laws. The statement is intended to provide a common vocabulary and analytical framework to aid market participants to analyze structures and engage with the SEC on any needed registrations or other regulatory requests.

The SEC staff identified two broad categories of tokenized securities. The first consists of issuer-sponsored tokenized securities, in which an issuer elects to issue its own securities in digital or crypto-asset form. In these structures, the issuer remains directly responsible for the securities, and the token functions as a representation of the issuer’s equity or debt interest, often integrated with the issuer’s recordkeeping systems. The SEC staff notes that tokenization can be done in different operational ways, including (i) on-chain recordkeeping wherein the issuer uses the blockchain system as the main ownership record (so transfers on that system directly reflect ownership) or (ii) off-chain recordkeeping with on-chain “wrapper”, wherein the issuer keeps the official ownership record in a more traditional way, but uses token transfers to trigger updates to that official record.

The second category encompasses third-party-sponsored tokenized securities, where an unaffiliated party tokenizes an existing security issued by another entity. The SEC staff observed that these arrangements raise distinct legal and risk considerations, as the token holder’s rights may differ from those of a direct holder of the underlying security.

Within third-party tokenization, the SEC staff described two commonly observed approaches. In one model, the underlying securities are held in custody, and the token represents an interest in or entitlement to those custodial holdings. In the other, the token provides synthetic exposure to the underlying security, rather than ownership, potentially through a linked instrument or a security-based swap structure. The SEC staff noted that synthetic arrangements may implicate additional regulatory regimes, including those applicable to security-based swaps.

The statement reflects the SEC staff’s view that tokenization does not alter the fundamental application of the securities laws, and that careful analysis of structure, rights and risks remains essential.

For more information see the joint statement of the staff of the SEC’s Divisions of Corporation Finance, Investment Management and Trading and Markets.

 

Divisional Guidance Addresses Operational Limits During a Potential Government Shutdown

On January 30, 2026, the SEC’s Divisions of Corporation Finance, Investment Management and Trading and Markets each published guidance outlining how their operations would be affected in the event of a federal government shutdown as a result of a federal funding lapse. The guidance reflects the SEC’s continued practice of limiting staff activity during funding lapses while maintaining certain core functions and emergency capabilities.

The Division of Corporation Finance advised that, although EDGAR would remain operational and filings could continue to be submitted, staff would generally be unavailable to review filings, accelerate registration statements, or qualify offering materials. Issuers seeking to proceed with registered offerings during a shutdown would need to rely on existing statutory and regulatory mechanisms, and would continue to bear full responsibility for the completeness and accuracy of their disclosures.

The Division of Investment Management advised that its ability to respond to routine inquiries and process applications would be sharply curtailed. Limited staff resources would be reserved for emergency matters and certain mechanical functions, while most requests for interpretive guidance or regulatory relief would be deferred until normal operations resumed.

The Division of Trading and Markets advised that its staff would also operate on a restricted basis, with emergency contact channels remaining available for urgent market issues. Deadlines and filing-date mechanics that depend on ‘business day’ under Rule 19b-4 (SRO rule filings) will be affected

Collectively, the guidance underscores the importance for issuers, registrants and market participants to plan for regulatory uncertainty in advance of a potential funding lapse.

For more information, see the guidance from the SEC’s Division of Corporation Finance, Division of Investment Management and Division of Trading and Markets.

 

Commission Approval Marks a Scaled-Back PCAOB Budget and Lower Accounting Support Fee

On January 22, 2026, the SEC approved the PCAOB’s proposed budget and the related accounting support fee (“ASF”) for 2026. The SEC approved a $362.1 million 2026 budget—down $37.6 million (9.4%) from 2025—and an ASF of $306.0 million, down $68.9 million (18.4%) from the prior year. The approved budget represents a notable decrease in overall spending, alongside meaningful cuts to compensation for the PCAOB’s chair and board members.

The ASF assessed to fund the PCAOB was also reduced, with the majority allocated to public company issuers and a smaller portion assessed on registered brokers and dealers. The reductions align with broader efforts by the SEC to exercise closer oversight over PCAOB expenditures.

In a public statement, SEC Chair Paul Atkins described the approval as an initial step in a broader recalibration intended to refocus the PCAOB on its core mission of improving audit quality while avoiding unnecessary complexity and costs. Chair Atkins reiterated two longstanding concerns he previously raised in PCAOB budget votes—board compensation levels and the absence of a comprehensive, forward-looking strategic plan—and emphasized that budgeting should be anchored in clear objectives and measurable benchmarks. He identified development of an updated, long-term strategic plan as a priority for 2026.

 

Select Recent Securities Law Legislation Proposals

A summary of selected recent securities law-related legislation proposed in January 2026 follows:

Name of Bill	Description of Bill	Latest Action
H.R.6967	To amend the Exchange Act to establish within the Securities and Exchange Commission the Public Company Advisory Committee, and for other purposes.	House - 01/22/2026 Ordered to be Reported (Amended) by the Yeas and Nays: 39 - 15.
H.R.7085	To amend the Exchange Act to repeal certain disclosure requirements related to conflict minerals, and for other purposes.	House - 01/22/2026 Ordered to be Reported (Amended) by the Yeas and Nays: 30 - 24.
H.R.7127	To amend the Securities Act to exempt off-exchange secondary trading from state regulation where such trading is with respect to securities of an issuer that makes publicly available certain current information, and for other purposes.	House - 01/16/2026 Referred to the House Committee on Financial Services.
H.R.7186	To amend the Investment Company Act of 1940 to prohibit certain large-scale companies from purchasing single family residences.	House - 01/21/2026 Referred to the House Committee on Financial Services
H.R.7187	To amend the Exchange Act to provide an exemption from the definition of a broker for certain registered representative-owned personal services entity, and for other purposes.	House - 01/21/2026 Referred to the House Committee on Financial Services.
H.R.7221	To amend the Investment Company Act of 1940 to prohibit certain large private funds and registered investment companies from purchasing single family homes.	House - 01/22/2026 Referred to the House Committee on Financial Services.
S.3749	To lower the aggregate market value of voting and non-voting common equity necessary for an issuer to qualify as a well-known seasoned issuer.	Senate - 01/29/2026 Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

 

This publication is for general information purposes only. It is not intended to provide, nor is it to be used as, a substitute for legal advice. In some jurisdictions it may be considered attorney advertising.