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Frequently Asked Questions
  SEC Proxy Process Roundtable
Identification Number 1657
SEC Proxy Process Roundtable
Publication Date: November 13, 2018

The SEC will host its roundtable on the proxy process on November 15, 2018. Nasdaq's North American General Counsel John Zecca will participate in the roundtable, which will review key aspects of the U.S. proxy system, including proxy voting mechanics and technology, the shareholder proposal process, and the role and regulation of proxy advisory firms. Public comments related to these topics are encouraged and can be submitted here, before or after the roundtable.

Publication Date*: 11/13/2018 Mailto Link Identification Number: 1657
Frequently Asked Questions
  5 Ways Companies are Transforming Their Businesses with Machine Learning
Identification Number 1654
5 Ways Companies are Transforming Their Businesses with Machine Learning
Publication Date: November 5, 2018

At the intersection of machine learning and natural language processing sits Amenity Analytics, a relative newcomer to the text analytics industry. Amenity's founders see the information gushing from today's knowledge economy as a massive, untapped resource of important data for companies across a spectrum of industries.

The brainchild of a former portfolio manager and a machine learning academic, Amenity Analytics has automated the process of sifting through complex documents and narrative content to find and visualize meaningful data sets. For businesses that rely heavily upon the consumption and analysis of complex documents and texts, natural language processing (NLP) tools can save man-hours on a massive scale and deliver powerful insights to decision makers.

We spoke with Nate Storch, co-founder and CEO of Amenity Analytics, about how companies can stop drowning in information and start surfing it instead.

NLP is the branch of computer science that turns complex, unstructured data—specifically text written in human language—into structured datasets that can then be processed, visualized and analyzed.

I was an investment portfolio manager in my previous career, a job that required constant scanning of SEC filings, earnings call transcripts, broker research and news for nuggets of information relevant to our investments. Amenity Analytics was born out of finding a solution to information overload, which was one of my biggest problems in financial analysis.

I first learned about natural language processing when I was researching an investment and met my future business partner, Professor Ronen Feldman. Prof. Feldman is an early pioneer in NLP who coined the phrase "text mining" back in the '90s.

I saw immediately that NLP technologies could be a game-changer for me in investment analysis, not only bringing enormous time efficiencies to scanning complex financial documents but also creating data sets that could be visualized and analyzed to uncover trends and outliers. I saw potential applications of NLP to many other industries as well, and that's why Prof. Feldman and I founded Amenity Analytics.

We created a platform that gives people the ability to take a document and apply artificial intelligence to mimic the perspective of an expert. Forensic accountant, top financial analyst, an expert in ESG—all of those models are there, and countless others can be created. Amenity's NLP platform can quickly highlight, extract, and visualize data so users can spot patterns and outliers or establish causality—correlating stock prices with suspicious behavior, for example.

When you think about it, it's ridiculous that humans are still consuming text in much the same way we did 100 years ago. At Amenity, we are challenging our clients to reassess a process very core to their operations: reading complex financial documents. Here are five case studies that illustrate the innovative ways our clients are applying Amenity's NLP tools to solve problems, answer questions, and revolutionize the way they consume information.

1. Analyze quarterly earnings conference call transcripts to uncover deception or looming issues.

One of the spaces we're most focused on is my old industry—investment services. Amenity's platform is designed to address the needs of financial analysts and portfolio managers on a fundamental level, in a way that is going to be highly disruptive for the industry.

We are working with some of the world's largest and most sophisticated hedge funds. Our platform empowers their discretionary investors—the people doing true fundamental analysis—by providing additional insights and datasets into what's going on at their targeted companies.

For example, Amenity's software can process earnings conference call transcripts to flag companies that may be in trouble—before simmering issues impact earnings results. We've embedded the language analysis techniques used by CIA interrogators into our platform to capture and highlight clusters of language that might indicate uncertainty, doubt or even dishonesty, such as clichés and detour statements. A sudden spike in this type of language used by a CEO during a company's earnings call is often a reliable indicator that something is amiss.

Our platform can also process documents through a niche investment lens. For example, we built processing models from the perspective of an Environmental, Social and Governance (ESG) expert. If an analyst wants to quickly find pertinent ESG information related to a potential investment in a certain document, in the news, or in a 10-K or in an earnings call transcript, they can enter our platform and use an ESG model to highlight their documents from the ESG perspective.

2. Make better underwriting decisions, faster.

Starr Insurance Companies has customized Amenity's platform to assist in underwriting Directors and Officers (D&O) Insurance. Underwriters are often tasked with coming to a decision very quickly around whether they want to underwrite a company's D&O risk or not. And in order to make that decision, they have to process and understand information that's included in a stack of documents that can be a foot high.

Starr Insurance turned to us for help, first off, to create a model that analyzes those documents from the perspective of their top underwriters, those who consistently have the best feel for the data points that indicate whether a company is an acceptable risk or an unacceptable risk. We've been able to define and codify those data points, so the model can lead the underwriter directly to the relevant text in those documents that reveals that critical information.

So now, when one of their underwriters sits down to start analyzing a company, he has a checklist and nearly all the information that he is responsible for knowing is right there in front of him, already highlighted. Not only is he more efficient, but he's also more accountable because the information that he's responsible for knowing has now been defined and is very much measurable.

As the company continues to acquire and track relevant information, Starr's underwriters can add it to their predictive models to identify where and how those data points correlate to risk or to opportunity. As machine learning improves underwriting models, it drives smarter decision-making. For example, an underwriter could review the historical record of various types of litigation to identify how they correlate to claims and problematic situations. Underwriters can score this data so they can identify specific risks for the models to flag so it can extract related commentary.

Another insurance client recently tasked us with tracking diseases and epidemics. The company was trying to understand the path that an epidemic was taking by analyzing how people were talking about it—first in the news, second in social media and finally within the academic and scientific communities. We created a tracking model that brought together all three views to help the insurer separate true emerging epidemics from controlled diseases that were merely getting overblown in the news media or going viral in social media.

3. Track sentiment on political and economic issues.

Amenity was recently approached by a large investment bank to monitor news and conversations related to trade wars and flag changes in the tone of policy makers. For this project, we conducted a dynamic analysis of social media conversations and news statements regarding trade and tariff issues that were being made by major players in political and economic arenas, including Donald Trump, Steve Mnuchin, Robert Lighthizer and Wilbur Ross.

The trick in monitoring social media—as well as monitoring increasingly fragmented traditional media outlets and blogs—is cutting through noise to find data that is truly relevant to the specific topic. We identified and scored trade-related terms in key regions of the world, looking at equity, currencies, credit, and commodities. We were able to pull from unlimited sources and social media, cut the noise and false positives, and flag statements that were indicative of shifts in rhetoric or perspective.

4. Establish causality of market moves.

NLP is a useful tool for teasing out underlying factors of sudden movements in price or volume of trades in commodities, stocks, or currencies. Amenity was recently challenged by a client to sift through over 5 million news articles to discern what made the dollar move during a specific range of days. We were able to program our models and deliver an answer to our client in less than a week, via a dashboard of visualized data which enabled them to pinpoint the cause of each move.

We've created a similar dynamic analytic system for another client, centered around monitoring conversations related to cryptocurrencies. It processes discussions on cryptocoins to flag what is moving markets in each of them. We input Twitter's raw API, blogs and chatrooms that discuss cryptocurrency, and scraped various news sources such as Dow Jones and Reuters. We created a taxonomy of weighted topics to score meaningful data, so the system can pinpoint news and conversations that are directly connected to changes in coin prices as well as to buy and sell recommendations.

5. Prioritize documents for review.

In fact, Nasdaq partnered with Amenity to harness NLP technology for its regulatory compliance program. Today, Nasdaq's analysts spend about 60% of their workday reviewing the more than 48,000 SEC filings submitted by Nasdaq companies each year. While their compliance program effectively evaluates securities for compliance with quantitative requirements (e.g., equity), it has limited ability to facilitate the qualitative elements of an analyst's review (e.g., equity offerings, investigations). Nasdaq believes that our technology can improve efficiency and save time by helping them prioritize the filings that require manual review without compromising the integrity of the market.


One of the easiest ways for public companies to experiment with this technology is to use it to systematically analyze the earnings call transcripts of their competitors. Boards and executive leaders can use NLP technology to see at a glance what's going on in their industries with an incredible level of depth and granularity. They can monitor what all the companies in their space are saying about the competitive environment—not just in their specific industry, but up and down the supply chain as well.

Amenity has recently launched a new cloud-based software solution called Viewer, which enables any interested party to simply log on through Amenity's website and rapidly process earnings call transcripts and uncover real-time, actionable insights that can only be gleaned by analyzing massive numbers of complex documents at scale. Soon we will be adding SEC Filings, news, and research to Viewer.


Nathaniel "Nate" Storch is the Co-Founder and CEO of Amenity Analytics, a New York and Israel based provider of NLP analytical solutions and software. Nate is an experienced financial industry executive with nearly two decades as an investor and business builder. Before co-founding Amenity Analytics, he served as Managing Partner of Pilgrim Hill Capital, where he provided equity-related capital and strategic advice to small and mid-cap companies. Previously, Nathaniel served as Partner and Senior Portfolio Manager at Swieca Holdings/Talpion Fund Management, Partner and Head of Equities at One East Partners, and Head of Merger Arbitrage Research & Event-Driven Healthcare at Highbridge Capital Management.

Publication Date*: 10/30/2018 Mailto Link Identification Number: 1654
Frequently Asked Questions
  Society for Corporate Governance Complimentary Directors' Cut Newsletter
Identification Number 1655
Society for Corporate Governance Complimentary Directors' Cut Newsletter
Publication Date: November 1, 2018

The Society for Corporate Governance is now offering complimentary access to its Society Alert - Directors' Cut® newsletter. This quarterly online newsletter is a compilation of governance-related news from the preceding quarter's weekly Society Alerts, with a view toward a director and C-suite audience. Each issue covers a range of relevant developments and guidance in areas such as audit/financial reporting, board composition/refreshment, board and key committee oversight, and shareholder engagement/activism - as well as institutional investor developments & perspectives.

Read the Society Alert - Directors' Cut for 2018 Q3 >>

Subscribe to the newsletter >>
Publication Date*: 11/1/2018 Mailto Link Identification Number: 1655
Frequently Asked Questions
  SEC Announces New Strategic Plan
Identification Number 1651
SEC Announces New Strategic Plan
Publication Date: October 29, 2018

The Securities and Exchange Commission recently announced its strategic plan to guide the agency's work over the next four years, with a primary focus on investors, innovation, and performance. SEC Chairman Jay Clayton, described the plan as, "a concise, straight-forward explanation of the goals that will guide us as our markets evolve" and stated that it is based on the core value of "serving long term Main Street investors."

Publication Date*: 10/29/2018 Mailto Link Identification Number: 1651
Frequently Asked Questions
  SEC Investigative Report: Public Companies Should Consider Cyber Threats When Implementing Internal Accounting Controls
Identification Number 1652
SEC Investigative Report: Public Companies Should Consider Cyber Threats When Implementing Internal Accounting Controls
Publication Date: October 29, 2018

The Securities and Exchange Commission recently issued an investigative report cautioning that public companies should consider cyber threats when implementing internal accounting controls, calibrate their internal accounting controls to the current risk environment and assess and adjust policies and procedures accordingly. The report is based on the SEC Enforcement Division's investigations of nine public companies that fell victim to cyber fraud, losing millions of dollars in the process.

Publication Date*: 10/29/2018 Mailto Link Identification Number: 1652
Frequently Asked Questions
  Learn How 6 Successful Women Earned a Seat at the Table
Identification Number 1650
Learn How 6 Successful Women Earned a Seat at the Table
Publication Date: October 18, 2018

Aspiring women leaders gathered in New York City at Nasdaq's MarketSite last week to hear firsthand how successful women earned a seat at the table in some of America's most high profile public company boardrooms. They also heard how they too can join the pipeline of board-ready women and ascend to the next rung on the corporate ladder.

Nasdaq teamed up with ICR to host this event, which featured a dynamic slate of experienced women – all of whom are current or former C-suite executives. Between them, these accomplished women currently serve on more than a dozen boards:

  • Betsy Atkins, Board member of Cognizant (Nasdaq: CTSH), Wynn Resorts (Nasdaq: WYNN), SL Green Realty, Schneider Electric and Volvo
  • Coco Brown, Founder & CEO of The Athena Alliance
  • Zoe Cruz, Board member of Ripple and Man Group Plc and the former Co-President of Morgan Stanley
  • Rachel Glaser, Board member of The New York Times Company and CFO of Etsy (Nasdaq: ETSY)
  • Claudia Fan Munce, Board member of NEA, Best Buy, Bank of the West/BNP Parabis Group, and CoreLogic
  • Diane Neal, Board member of Fossil Group, Inc. (Nasdaq: FOSL) and former CEO of Sur La Table and Bath & Body Works

Following are six key takeaways from our distinguished guests:


1) "Pay it forward." Betsy Atkins

To gain access to people in influential networks, you have to invest time and do something for them to prove you are valuable. Go out of your way to do a favor, make a meaningful introduction, or share useful information. For example, what can you do for some company in a private equity firm's portfolio? What door can you open? What presentation can one of those start-up companies make to your company that might result in buying their product or service?

You can't withdraw money from the bank until you put money in the bank. You have to forward invest with people, too. Don't ask for favors or introductions until you've proven you are worthy of making that withdrawal.


2) "Get to know the power players." Coco Brown

In order to be in the right place at the right time to be discovered, women need to be part of the power networks. These are the networks of private equity firms, venture capitalists, CEOs and board members. Don't overlook advisory roles for companies backed by private equity, because they offer a fluid proving ground for board service and access to private equity networks.


3) "Kiss a few frogs." Claudia Fan Munce

Consider helping a young company, which is basically a micro-version of a large company dealing with similar issues. There are incubators and accelerators in universities all over the country; there are local entrepreneurial programs in your communities. These organizations need people to bring skills because the little businesses they are nurturing can't afford to hire those skills.

Start engaging there and you will become known within what is actually a small network of investors and entrepreneurs. From there, you are in a better position to be tapped to advise larger start-up companies, privately funded companies and potentially a public board.

Hopefully your batting average is good. Then you will be elevated from startup advisor to advisor of a company that is now funded by a major institutional firm. You have to kiss a few frogs!


4) "Bring more than your gender to the table." Diane Neal

Accept a board seat when you are respected for what you know, when you can identify how you will add value, and when you will grow in some way from the experience. The relationship won't work if you join a board that wants you just because you are a woman.


5) "Take recruiter calls, even when you are happy with your job." Rachel Glaser

When you are ready to seek a board seat, it's important to reach out to the people who have mentored you and the board members of the companies you work for. Stay in touch, continue to be helpful to them, and make it known that you would like to be on a board. Plant those seeds with the people you like and know and trust.

Don't overlook recruiters. At The New York Times, board seats are filled by search firms. Take all those recruiter calls, even if you have no intention of leaving your current job, because a meaningful conversation that keeps you on their radar could lead to a spot on a board slate later.


6) "Look abroad for opportunities to serve on boards." Zoe Cruz

In the U.K., the government has established targets for FTSE 350 companies that, by the year 2020, 33% of their board and leadership positions at be held by females. Many British companies are looking to head hunters to find women candidates to help meet these targets. When you call your favorite recruiting firms, they will claim to be global, but most are very regional. Ask to be introduced to their European counterparts and then go meet with them. It's well worth your while.

If you were not able to attend the event in person, a video recording of the entire event is available here; a description of each segment along with a video link is provided below.

Changing the Face of Corporate Boardrooms

While more women are joining corporate boards than ever before, some say progress is too slow with only 20% of board seats among Fortune 1000 companies filled by women. In this fireside chat, Diane Neal discussed with CNBC's Bertha Coombs the changing face of corporate boardrooms, reflecting on her experience as a female director to share insights into why gender diversity in board composition matters now more than ever.
Watch a video of this fireside chat here>>

Building the Modern Boardroom

From the leaders at the largest investment firms and pension funds to the limited partners of venture firms, there is a growing call for a new form of corporate governance. There is a lot that is changing. In her presentation, Coco Brown shared more about this transformation and elaborated on where the opportunities lie for women in the process.
Watch a video of Coco's Presentation here>>

Advancing C-Suite Women to Board Service

The panel, moderated by Stacie Swanstrom, engaged four highly accomplished women who have made an impact in the boardrooms and the C-suites of many high profile organizations, including Etsy, Wynn Resorts, Cognizant and Morgan Stanley. The conversation focused on leadership lessons and perspectives gained during their careers and provided the audience with practical, actionable intelligence that they could use to prepare themselves for board service.
Watch a video of the panel discussion here>>

View pictures from this event here>>

Learn from other Winning Women like Janet Hill and Candace Duncan here>>


ICR is a leading strategic communications and advisory firm with offices in New York, Norwalk, Los Angeles, Boston, San Francisco and Beijing. The firm pairs capital markets veterans with senior communications professionals, bringing deep sector knowledge and relationships to more than 500 clients in 20 industries.

Publication Date*: 10/18/2018 Mailto Link Identification Number: 1650
Frequently Asked Questions
  Webcast Transcript: Nasdaq Speaks – Latest Developments & Interpretations
Identification Number 1646
Webcast Transcript: Nasdaq Speaks – Latest Developments & Interpretations
Publication Date: October 8, 2018

On September 6, 2018, hosted Nasdaq Speaks: Latest Developments & Interpretations. John Zecca, Senior Vice President, General Counsel North America and Chief Regulatory Officer and other senior Nasdaq Regulation Staff discussed the latest that Nasdaq-listed companies need to know including recent initiatives, rule changes, resources and practice pointers. A transcript of the webcast is now available.

Read the transcript >>
Publication Date*: 10/8/2018 Mailto Link Identification Number: 1646
Frequently Asked Questions
  SEC approves changes to Nasdaq Shareholder Approval Rules
Identification Number 1643
SEC approves changes to Nasdaq Shareholder Approval Rules
Publication Date: September 26, 2018

The SEC approved changes to the Nasdaq shareholder approval rules effective September 26, 2018. The primary changes eliminate the requirement for shareholder approval of private placement transactions priced below book value but at or above market value; modify the measure of "market price" from the consolidated closing bid price to the lower of the Nasdaq Official Closing Price (NOCP) or the five-day average of the NOCP; and simplify the rule text. The SEC's approval order reiterates its view that "the development and enforcement of meaningful corporate governance listing standards for a national securities exchange is of substantial importance to financial markets and the investing public, especially given investor expectations regarding the nature of companies that have achieved an exchange listing for their securities." This rule amendment is the result of a multi-year effort, including two public comment solicitations by Nasdaq.

Read SEC Release >>
Publication Date*: 9/26/2018 Mailto Link Identification Number: 1643
Frequently Asked Questions
  Comment Solicitation: Initial Listing Liquidity Measures
Identification Number 1645
Comment Solicitation: Initial Listing Liquidity Measures
Publication Date: October 5, 2018

Click here to read our Comment Solicitation >>

Nasdaq is soliciting public comment on its initial listing criteria relating to the liquidity of equity securities. The comment solicitation is designed to elicit views on whether the rules should be changed and the impact of certain specific changes being considered on investor protection, the liquidity of listed securities and capital formation.

We encourage all interested parties to review the detailed description in our Comment Solicitation and provide comments before November 16, 2018.

Electronic responses are preferred and may be addressed to:

Publication Date*: 10/5/2018 Mailto Link Identification Number: 1645
Frequently Asked Questions
  Wynn Resorts: 7 Tactics to Cultivate a World-Class Employment Brand
Identification Number 1644
Wynn Resorts: 7 Tactics to Cultivate a World-Class Employment Brand
Publication Date: October 4, 2018

It's been just eight months since Matt Maddox, CEO of Wynn Resorts (Nasdaq: WYNN), took the reins of the company following the abrupt departure of founder Steve Wynn following sexual misconduct allegations. During that short time, the company's board and leadership team have demonstrated they are serious about creating a workplace that fosters diversity and inclusion.

Perhaps the most public example of that commitment is the swift nomination and onboarding of three new women board members: Betsy Atkins, Dee Dee Myers and Wendy Webb. Nasdaq reached out to these newly-minted Wynn board members to learn more about the multi-faceted approach the company is taking to restore its employment brand and the trust of all its stakeholders, from shareholders to front-line employees.

They shared seven tactics Wynn has employed to emerge from the crisis stronger than ever—and with a world-class employment brand that maximizes its diverse talent pool.

1) Separate the CEO and Chairman roles.

When Steve Wynn stepped down, there was naturally concern that Wynn Resorts would have a difficult time separating the man from the brand—the very logo of the company is his signature. However, Matt Maddox, Wynn's new CEO, has spearheaded a smooth succession—in part because the board separated the roles of chairman and CEO when Steve Wynn stepped down.

The onboarding of a new CEO is a key opportunity for companies with a combined chairman/CEO role to consider separating that role. Wynn's board elected to split the roles, as they wanted to allow Matt to focus on leading the company through a potentially bumpy transition period. "Matt has taken this transition very seriously, devoting a lot of time in-person engaging with employees to listen to them and to share his vision for the company going forward," shared Betsy Atkins. "And when you look at the company's recent performance, Wynn hasn't missed a beat: The overall performance of the company has remained strong and the corporation continues to function smoothly."

2) Bring meaningful gender diversity to the board.

The Wynn Resorts leadership team committed to bringing a new perspective to company leadership and the board as the company turned its focus internally on gender diversity, inclusion, and sensitivity. The board recruited Betsy Atkins, Dee Dee Myers, and Wendy Webb through a very robust and transparent process, during which the entire board was fully engaged. Adding three new independent women directors placed the company among the top 40 of S&P 500 companies (by female board representation).

"There are mountains of evidence that show conclusively that diverse groups of decision-makers make better decisions. So diversifying the Wynn board quickly in the wake of Steve Wynn's departure was essential to navigating the crisis," said Dee Dee Myers. "Betsy, Wendy and I not only bring our unique perspectives and experiences to our roles, but we also bring new skills, and that has been helpful as the board develops and rolls out strategies to address a range of challenges, from improving workplace diversity and inclusion, to compliance, compensation and communications."

"Adding three new directors at once—let alone three new women directors—changes the dynamics in any boardroom," said Betsy Atkins. "However, we were warmly received, and the board's timing has allowed Dee Dee, Wendy, and me to be part of the launch of a whole new set of diversity and inclusion initiatives, both from an oversight as well as a participation standpoint. Wynn's board and leadership team are moving quickly to ensure the company and its employees come through this transition stronger than ever, and I'm thrilled to be a part of that work."

3) Recruit critical skillsets to the board.

With its new women board members, Wynn not only improved the board's gender profile, but added skillsets that will be instrumental in guiding the company going forward. Dee Dee Myers and Wendy Webb each have high PR profiles that can help to bolster Wynn's brand halo. They also bring critical crisis management, strategic communications and PR skillsets that the board can leverage to help Wynn communicate its new strategies and navigate the leadership transition smoothly.

Wynn Resorts is actually five businesses in one: entertainment, retail, hospitality, gaming, and dining, so there are myriad ways the company can leverage the talents and expertise of its new board members. Wendy spent 20 years as a senior executive at The Walt Disney Company, so she has an entertainment and direct-to-consumer perspective that is valuable on the Wynn Resorts board.

"I'm excited to bring to the Wynn Resorts board not only my experience in global travel & tourism learned over two decades at Disney, but also knowledge about the nuances associated with transitioning from a founder-led company to the next phase of professional management," said Wendy Webb. "Additionally, given my background in Investor Relations and Strategy, and through service on other public company boards, I recognize the importance of maintaining a sharp focus on creating value for shareholders. It is through this lens that I have approached my duties as a Wynn board member, while not losing sight of this company's culture and core values that make it a leading brand in the hospitality industry."

Dee Dee also brings considerable experience in public relations, messaging, transition management, and crisis management. She is currently executive vice president for worldwide corporate communications and public affairs at Warner Bros. Entertainment, so she is very familiar with the ripple effects of #MeToo issues.

Betsy Atkins' background as a veteran board member and a tech entrepreneur with experience with digital transformation, AI, branding, retail ecommerce and creating seamless omnichannel consumer experiences can be applied a number of ways to Wynn's business lines.

4) Benchmark the current culture.

The board and management team of Wynn are committed to having a workplace where every employee feels safe, supported, and has equal opportunities to develop his or her full potential. The first thing Matt and his leadership team did was benchmark the current culture.

Wynn conducted an employee-wide survey based on Fortune's "100 Best Companies to Work For" survey, adding questions related to diversity, working women, harassment, discrimination, and women's leadership opportunities to get a full baseline of how employees perceive the culture and working environment at Wynn Resorts. The leadership team has done a preliminary read-out of the results. Several focus groups have been created, each working on the departments that have the biggest impact on the employee base.

In addition, Wynn has engaged a compensation consultant to conduct a comprehensive pay equity study and a promotion equity study to review the rate of succession by gender and by ethnic groups. The company is also working with the Secretary of State of Nevada to participate in their gender equity workplace study.

"When I was approached about joining the board of Wynn Resorts, I quietly paid a visit to the Wynn Las Vegas property," said Betsy Atkins. "I wanted to get a read on its front-line employee base. Wynn is a premium hospitality company, delivering boutique luxury hotel service on a massive 4,000+ room scale—which means service employees are the core asset of the company's brand halo."

"At every level and every touch point at Wynn Las Vegas, I was consistently met with employees who were clearly happy to be working at Wynn and who truly cared about their customers. Whatever issues Wynn would face in the fallout of its founder stepping down, a demoralized and indifferent employee base wasn't one of them—a fact that reinforced my decision to join the company's board of directors."

5) Create a new division focused on leadership development.

Wynn has created a new division, the Culture and Community Department, which is specifically focused on leadership and development, diversity and inclusion, community relations, and gender equality. The entire 25,000 employee workforce of Wynn will feel the impact of the rollout of this division.

As part of this initiative, Wynn launched a Women's Leadership Council, and all four women directors (there was already one woman on the board, Patricia Mulroy) participated in the kickoff and will be involved going forward. The council will host town hall meetings, chats, and networking events to promote advancement of the female employee base.

Wynn is also expanding its already robust internal organizational development program to include leadership development curriculum that covers its broad employee base. There are classes that develop interns into first-time leaders, courses to develop supervisors and managers, courses for rising directors and senior VPs, and training for junior executives reporting to Wynn's C-suite.

6) Roll out a comprehensive compliance and education program.

Wynn Resorts has revisited and updated its internal employee "code of conduct" and associated training and taken that process a step further by adding specific diversity and inclusion courses. The content and complexity of the courses are tailored by the level of employee: directors and above take an eight-hour course, first-line managers or supervisors take a four-hour course, and line level employees in hospitality, restaurants or retail take a two-hour course.

The curriculum includes unconscious bias awareness, updated anti-sexual harassment and compliance training, and very comprehensive reporting training for management. An outside firm is implementing the program, which is supervised and owned at the senior level of Wynn's internal human resources and legal departments.

7) Rebuild trust with shareholders and foster support for long-term strategies.

As Wynn's leadership team began rolling out internal strategies to bolster trust with employees and consumers, the board participated directly in the most recent proxy outreach season. The goal was to update shareholders on how the company's leadership team is navigating the leadership transition and to generate support for the new long-term strategies the company is implementing to ensure the employee brand is strong.

Board members had face-to-face conversations with several big index funds, including Vanguard, State Street Global Advisors and BlackRock. Along with Wynn's general counsel and CFO, board members also had conversations by phone with institutional shareholder corporate governance and proxy voting groups.


Wynn Resorts (Nasdaq: WYNN) is a $16 billion developer and operator of premium resorts and casinos.

Betsy Atkins serves as President and Chief Executive Officer at Baja Corp, a venture capital firm. She is currently on the board of directors of Wynn Resorts, Schneider Electric, Cognizant, and a private company, Volvo Car Corporation, and served on the board of directors of The Nasdaq Stock Market LLC and as CEO and Board Chairman at Clear Standards.

Margaret J. "Dee Dee" Myers has been Executive Vice President, Worldwide Corporate Communications and Public Affairs for Warner Bros. Entertainment, a broad-based entertainment company and division of TimeWarner, Inc., since September 2014. She also serves on the board of the National Museum of American History. Myers served as White House Press Secretary under President Bill Clinton during his first term.

Winifred "Wendy" Webb has been Chief Executive Officer of Kestrel Corporate Advisors, an advisory services firm counseling corporate and non-profit organizations on strategic business issues, including growth initiatives, digital marketing, board governance and investor relations, since February 2013. Ms. Webb currently serves on the Boards of ABM Industries (since 2014) and 9 Spokes (since 2015). She also serves as Co-Chair of Women Corporate Directors, Los Angeles/Orange County Chapter.

Publication Date*: 10/4/2018 Mailto Link Identification Number: 1644
Frequently Asked Questions
  SEC Staff to Host Roundtable on the Proxy Process
Identification Number 1642
SEC Staff to Host Roundtable on the Proxy Process
Publication Date: September 25, 2018

Staff of the Securities and Exchange Commission will host a roundtable on November 15, 2018 to hear investor, issuer, and other market participant views about the proxy process and rules. The roundtable will focus on key aspects of the U.S. proxy system, including proxy voting mechanics and technology, the shareholder proposal process, and the role and regulation of proxy advisory firms. The roundtable, which will be webcast live on the SEC's website, will be held at the SEC's headquarters in Washington, DC, and will be open to the public. Views and comments may be submitted electronically or in paper in advance of or after the roundtable.


Submit electric comments here>> SEC Internet submission form or
Publication Date*: 9/25/2018 Mailto Link Identification Number: 1642
Frequently Asked Questions
  Business Development Companies Seek to Improve Retail Investor Access to Private Markets
Identification Number 1641
Business Development Companies Seek to Improve Retail Investor Access to Private Markets
Publication Date: September 24, 2018

The Securities and Exchange Commission's (SEC) Acquired Fund Fees and Expenses Rule (AFFE) has constrained investment and liquidity in business development companies (BDCs) and limited the ability of main street investors to invest in private companies. Here's how.

BDCs provide funding to middle market companies that are not yet large enough to access broad capital markets but require more capital for growth than banks can provide. The BDC corporate structure also offers retail or "main street" investors the opportunity to invest in private companies, through a vehicle that is more accessible than other forms of private investing that require investors to have a high net worth and a 10+ year commitment.

Late last month, SEC Chairman Jay Clayton told The Wall Street Journal that individual investors need more access to the private markets. In his speech in Nashville, he also said that companies located in the center of the U.S. (where there is less venture capital funding) need more access to capital. BDCs can help close both the investment opportunity gap and the capital gap. The industry, however, is hampered by an SEC disclosure requirement that appears to be misapplied.

We spoke with several members of the Small Business Investor Alliance (SBIA), an advocate for investors in small and medium sized businesses, to get a better understanding of the complexities of this issue and why a fix is long overdue.

BDCs are important to the economy.

BDCs were created by Congress in 1980 to fill the void left by traditional lenders that found themselves unable to lend to small and mid-sized businesses due to increased regulatory burdens. Currently BDCs have over $80 billion invested in small to medium sized businesses. BDCs must invest at least 70% of their assets in active small and mid-sized businesses based in the United States. They invest in a variety of industries and sectors across America including manufacturing, healthcare technology, aerospace, consumer products, food and beverage, energy, media, and IT. BDCs have various investment strategies, but typically make secured and unsecured loans between $10-$50 million to middle market companies. Many of these companies grow into household names: Cirque Du Soleil, Formula One, National Surgical Hospitals, and Brunswick Bowling are all companies that were financed at some point through BDC investments.

While the BDC universe is still relatively small as compared to that of closed-end funds, it plays a significant role in the economy: "BDCs facilitate capital formation into the middle market sector of the economy which is responsible for 1/3 of private sector jobs and produces more than $6 trillion in revenues annually," said Tonnie Wybensinger, Executive Director of the SBIA's BDC Council.

The AFFE Rule overstates the expenses of investing in BDCs.

The SEC passed the AFFE Rule in 2006 in an effort to help investors better understand the full spectrum of fees and expenses incurred by registered funds, in particular those that invest in other funds as part of their investment strategy. However, the application of the AFFE disclosure requirement overstates the expenses of mutual funds and other registered funds that invest in BDCs. BDCs hold a unique place in the registered funds' world acting as an operating company within a closed end fund structure. Adding the total expenses of the BDC into the expense ratio of a regulated fund effectively double counts the impact in a registered fund's expense ratio. A BDC's trading price already reflects its operating expense structure, which reduces the total return of the acquiring funds' investment in the BDC. Reflecting these expenses again under the AFFE rule results in double counting a BDC's expenses. The existing application of the AFFE rule disclosure to a BDC investment is therefore misleading and inaccurate.

It is this overstatement of the regulated fund's expense ratio and the misinformation it portrays that resulted in major index providers excluding BDCs in 2014 from index eligibility and contributed to a BDC industry-wide decline in institutional ownership and IPOs.

BDCs are important to main street investors.

BDCs offer retail investors the opportunity to participate in the growth phase of small and mid-sized private companies, a sector of the market that is increasingly capitalized outside of public markets. Historically, BDCs have provided good returns to investors compared to traditional fixed-income investments: "During the past three years, BDCs have returned on average approximately 9% per annum, according to the Wells Fargo BDC Index," shared Wybensinger. "For a fixed income-oriented product, that's a pretty good return for investors, whether they are retail or institutional."

The exclusion of BDCs from major indices triggered a material decline in BDC IPO activity and a significant decline in institutional ownership (which dropped from 42% at the end of 2013 to 29% by the end of 2017). Investment and liquidity in the BDC industry have been constrained as a result, and fewer BDC IPOs means fewer opportunities for retail investors to participate in the creation of new firms bringing additional capital to contribute to the growth phase of small and mid-sized businesses.

"The loss of institutional ownership impacts the quality of governance for the BDC industry, and by extension harms retail investors. Fewer institutional owners means lower voter turnout and limited professional oversight of BDC managers, for example through research analyst coverage," said Liz Greenwood, Corporate Secretary and Chief Compliance Officer of publicly traded BDC, BlackRock TCP Capital Corp. (Nasdaq: TCPC) and a member of SBIA's legal steering committee. "There's an inherent governance benefit to retail investors when an industry has more institutional investors."

"BDCs are effectively excluded from passive investment manager investment," shared Ian Simmonds, CFO of TPG Specialty Lending and Chair of SBIA's BDC Council. "BDC portfolio companies are executing long-term growth strategies, and institutional shareholders tend to be more fundamentally based in their analysis. Exempting BDCs from the AFFE Rule will bring more stability to the sector's ownership, more liquidity into BDC stocks, and more depth to the overall shareholder base—all of which benefits retail shareholders."

The SEC has the authority to remedy this situation.

As markets evolve and change, a modernization of the regulatory framework supporting them is at times warranted. In fact, in the latest draft of the 2019 House Appropriations Bill Report, issued earlier this summer, Congress indicated that it would like the SEC to revisit the AFFE Rule as it pertains to BDCs.

There is precedent for exempting corporate structures similar to BDCs from AFFE disclosure. REITs and closed-end funds are already exempted from AFFE disclosure. When the SEC passed the AFFE rule in 2006, the BDC industry was in its infancy and there was no organized representative industry body to advocate on its behalf for exemption.

"We believe that while the AFFE Rule itself is fundamentally sound, its disclosure requirements shouldn't apply to BDCs, just as they don't apply to REITs. Exempting BDCs from the AFFE Rule will steer additional capital to the middle market sector of the economy and increase investor access to private companies, catalyzing job creation and economic growth," said Wybensinger.

For more information, visit and read SBIA BDC Modernization Agenda >>


Liz Greenwood is Corporate Secretary and Chief Compliance Officer of BlackRock TCP Capital Corp. (Nasdaq: TCPC) and a Managing Director of BlackRock TCP Capital's advisor, Tennenbaum Capital Partners, LLC. She also serves on the Legal Steering Committee of the SBIA.

Ian Simmonds is the Chief Financial Officer of TPG Specialty Lending, Inc. and a Managing Director of TPG Sixth Street Partners. He also serves as Chair of the SBIA's BDC Council.

The Small Business Investor Alliance (SBIA) advocates for investors of the small and medium-sized businesses that are a critical source of job growth in the U.S. The SBIA is the largest voice for business development companies (BDCs) in Washington, D.C., representing lower middle market private equity funds and investors who provide vital capital to small and medium sized businesses nationwide. Tonnie Wybensinger serves as the Executive Director of the SBIA BDC Council.

Publication Date*: 9/24/2018 Mailto Link Identification Number: 1641
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