USA Law and Practice Contributed by: Lisa Fontenot, Jennifer Broder, Per Chilstrom and Lothar Determann, Baker McKenzie
• detailed information regarding the compensation of certain executive officers and the directors; • the stock ownership of certain executive officers and the directors; • descriptions of certain related party transactions; and • information related to the company’s code of ethics, hedging policies, insider trading policies, compensation clawback policies and related party transaction policies. Public companies are also required to disclose in a current report certain changes and other events relat - ed to corporate governance, including: • changes in control of the company; • changes in directors, certain officers and certain compensatory arrangements; • amendments to the company’s organisational documents; • amendments to and waivers of the company’s code of ethics; and • voting results of shareholder meetings. Applicable stock exchange rules require public com - panies to provide certain governance documents on their websites, including the charters of their audit, compensation and nominating committees, and, in the case of NYSE listed companies, their corporate governance guidelines and codes of the ethics. Public companies are also required to file their insider trad - ing polices and compensation clawback policies, as exhibits to their annual reports. 5.3 Incorporation and Registration As discussed in 1.1 Corporate Forms and Govern- ance Requirements , companies are typically incor - porated or organised at the state level. Companies are required to file their certificates of incorporation or equivalent organisational documents with the rel - evant Secretary of State (including any amendments to those documents), and most states require compa - nies to make annual or biennial compliance filings pro - viding certain fundamental company details (such as company name, business address, registered agent, and names of directors) to ensure the relevant govern - ment agencies have up-to-date information regarding
the company. These documents and filings are typi - cally available to the public. 5.4 Global Anti-Money Laundering The US Bank Secrecy Act (BSA) and its implementing regulations as promulgated by the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) prescribe the US AML regulatory framework, including requirements for: • AML programme implementation and maintenance; • customer identification and due diligence; and • recordkeeping and reporting. However, these generally apply only to covered finan - cial institutions (eg, banks, broker-dealers, money ser - vices businesses) and certain other entity types (eg, precious metals dealers, casinos, operators of credit card systems). As a general matter, US companies, other than the certain covered entities, are not subject to AML regulatory requirements. Under federal banking regulators’ requirements, a bank’s board of directors must approve the bank’s AML programme (or provide authority to a designee for such approval). As a general matter, non-regulat - ed company boards are required to provide the same oversight and guidance to AML risk issues as they are for other compliance risk areas. US law applicable to non-regulated entities is not prescriptive as to AML risk in this regard. Liability for Non-Compliance Directors can be exposed to personal liability if they fail to exercise good-faith oversight of a financial institution’s AML programme and compliance with the BSA and FinCEN regulations, or if they ignore red flags as to AML-related risks that could expose the company to liability under the BSA or FinCEN regula - tions, where AML compliance is a key risk area for the company (eg, in the case of banks, broker-dealers and other regulated entities).
727 CHAMBERS.COM
Powered by FlippingBook