Regulatory Compliance Checklist to Know for Investor Relations

Understanding regulatory compliance is crucial for effective investor relations. It ensures transparency, protects investors, and promotes fair trading practices. Key regulations like the Securities Exchange Act and Sarbanes-Oxley Act set the standards for financial reporting and corporate governance.

1. Securities Exchange Act of 1934 compliance

   • Regulates the trading of securities in the secondary market.
   • Requires public companies to disclose financial and other significant information.
   • Aims to protect investors from fraudulent activities and ensure fair trading practices.

2. Sarbanes-Oxley Act (SOX) requirements

   • Mandates stricter financial reporting and internal controls for public companies.
   • Establishes penalties for fraudulent financial activity and requires CEO/CFO certification of financial statements.
   • Enhances the independence of external auditors and increases accountability.

3. Regulation Fair Disclosure (Reg FD) adherence

   • Prohibits selective disclosure of material information to certain investors.
   • Requires that all investors have equal access to material information.
   • Aims to promote transparency and fairness in the securities markets.

4. SEC filing deadlines (10-K, 10-Q, 8-K)

   • 10-K: Annual report due 60-90 days after fiscal year-end, providing comprehensive financial data.
   • 10-Q: Quarterly report due 40-45 days after the end of each fiscal quarter, summarizing financial performance.
   • 8-K: Current report filed within four business days of significant events affecting the company.

5. Insider trading policies and procedures

   • Establishes guidelines to prevent trading based on non-public, material information.
   • Requires reporting of trades by insiders to ensure transparency.
   • Implements training and monitoring to enforce compliance.

6. Material information disclosure guidelines

   • Defines what constitutes material information that must be disclosed to investors.
   • Requires timely and accurate disclosure to prevent misinformation.
   • Emphasizes the importance of context in determining materiality.

7. Financial reporting accuracy and transparency

   • Ensures that financial statements are free from material misstatements and accurately reflect the company's financial position.
   • Promotes the use of reliable accounting practices and regular audits.
   • Encourages clear communication of financial results to stakeholders.

8. Corporate governance best practices

   • Advocates for a strong board of directors with independent members.
   • Encourages transparency in decision-making processes and accountability to shareholders.
   • Promotes ethical conduct and compliance with laws and regulations.

9. Proxy statement and annual meeting regulations

   • Requires companies to provide detailed information to shareholders before annual meetings.
   • Includes disclosures about executive compensation, board nominees, and shareholder proposals.
   • Ensures that shareholders can make informed decisions on corporate governance matters.

10. Foreign Corrupt Practices Act (FCPA) compliance

    • Prohibits bribery of foreign officials to obtain or retain business.
    • Requires accurate record-keeping and internal controls to prevent corruption.
    • Emphasizes the importance of ethical business practices in international operations.

11. Dodd-Frank Act requirements

    • Introduces reforms to increase transparency and accountability in the financial system.
    • Mandates disclosure of executive compensation and the ratio of CEO pay to median employee pay.
    • Establishes protections for whistleblowers and enhances consumer protection measures.

12. GAAP and IFRS reporting standards

    • GAAP: Generally Accepted Accounting Principles, the standard framework for financial reporting in the U.S.
    • IFRS: International Financial Reporting Standards, used in many countries outside the U.S.
    • Companies must ensure compliance with the applicable standards for accurate financial reporting.

13. Whistleblower protection policies

    • Protects employees who report unethical or illegal activities from retaliation.
    • Encourages a culture of transparency and accountability within organizations.
    • Establishes clear procedures for reporting concerns and investigating claims.

14. Conflict of interest disclosures

    • Requires disclosure of any personal or financial interests that may influence decision-making.
    • Aims to prevent situations where personal interests conflict with the interests of the company or its shareholders.
    • Encourages transparency and ethical behavior among executives and board members.

15. Environmental, Social, and Governance (ESG) reporting

    • Involves disclosing information related to environmental impact, social responsibility, and governance practices.
    • Aims to provide stakeholders with insights into the company's sustainability and ethical practices.
    • Increasingly important for attracting investors who prioritize responsible investing.