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IPA Submits Comment Letter on NASAA’s Proposed
Revisions to the Form U-1


On October 22nd, the Institute for Portfolio Alternatives (IPA) provided to NASAA’s Corporation Finance Section in response to its request for comments on revisions to the Form U-1 with concerns about the proxy voting process and NASAA’s Statements of Policy (SOP) (the “Proposal”).

The proposed revisions to the Form U-1 would establish new reporting requirements, including a requirement for issuers to file proxy solicitation materials with NASAA members within two business days after filing such materials with the SEC. NASAA stated that the revisions are designed to address “instances in which issuers conducting registered offerings have sought shareholder approval on – and furnished proxy solicitation materials in connection with – certain matters that raise investor protection concerns.”

The Proposal is the second significant rule proposal related to corporation finance, following recent proposed revisions to NASAA’s REIT Guidelines. (IPA’s prior comment on NASAA’s proposed REIT Guidelines is available .) The Proposal would require the submission of all proxy materials filed with the SEC for review and comments, including preliminary and definitive proxy statements, definitive additional materials and soliciting material.

In our comment letter, IPA noted that these proposed changes should be thoughtfully considered in light of the existing federal oversight framework for the SEC’s review of proxy materials, potential stockholder confusion and new burdens imposed on issuers, including increased compliance and regulatory costs. IPA believes NASAA should consider the scope and timing of any review of such proxy materials filed with the SEC to be aligned with the most reasonable and effective means to address NASAA’s goals.

Establishment of workable parameters include:

  • Submission should apply only to proxy statements that propose a revision that conflicts with, or the removal of, a charter provision required by a NASAA SOP;
  • Issuers should only be required to submit preliminary proxy statements; and
  • State securities administrators should be required to notify issuers of impending comments within a specified period, similar to the SEC.

We appreciate the dedication of our members, Ali Connaughton, a partner in Morrison Foerster’s REIT and Corporate Finance | Capital Markets practice, and Howard Hirsch, Of Counsel at Morris, Manning & Martin, to inform our response, support our efforts and voice their concerns with NASAA’s proposal. As always, we will share additional updates on this and other related NASAA proposals as we continue to monitor any new developments. You can visit the IPA’s to stay current on all our advocacy initiatives. If you have any questions, please don’t hesitate to reach out.


Anya Coverman
President & CEO
Institute for Portfolio Alternatives