SEC SEEKS COMMENTS ON CHANGES TO MT RULES
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The Securities and Exchange Commission or SEC is seeking public comments on proposed amendments to the rules governing material transactions (MT) and related party transactions (RPT), including execution of diverse and complex transactions arising from new business practices, and re-definition of relevant terms, according to the SEC release yesterday.
The proposed amendments aim to increase clarity and consistency with regard to listed companies' transactions by taking into account appropriate investor protection and reasonable burdens towards listed companies.
Given the changing economic and business environments, listed companies are increasingly engaged in more diverse and complex transactions; however, the current rules may not cover – or in some cases are not applicable to – certain types of transactions. For example, giving financial assistance to a third party which is not considered a transaction in the normal course of business of listed companies; therefore, shareholders are not involved in the decision making regarding such transaction.
