SEC Issues C&DIs For Securities Act Rule 701

On June 23, 2016, the SEC Division of Corporation Finance (the "Division") issued new Compliance and Disclosure Interpretations ("C&DIs") for Securities Act Rule 701.  The new C&DIs address the exemption for offers and sales of securities pursuant to certain compensatory benefit plans and contracts relating to compensation.  Highlights of the C&DIs include the following:

• An acquirer in a merger transaction that assumed the target company's derivative securities does not need an exemption if, at the time of the grant by the target, the compensatory benefit plan under which the securities were issued permitted the assumption without the consent of the holders of the derivative securities.