Division of Corporation Finance Director Bill Hinman Announces Intention to Conclude His Tenure Later This Year

The Securities and Exchange Commission today announced that William H. Hinman, Director of the SEC’s Division of Corporation Finance, plans to leave the SEC later this year.

Since joining the SEC in May 2017, Mr. Hinman led the Division’s work on a wide range of issues critical to the interests of Main Street investors, small businesses and our markets. In particular, under Mr. Hinman’s leadership, the Division advanced nearly 50 mission-oriented initiatives, including efforts to modernize, streamline and improve public company disclosures, the proxy process and the securities offering framework. Mr. Hinman also guided the Division and the agency in addressing emerging issues and providing timely guidance to market participants. For example, Mr. Hinman led efforts regarding the rapid innovation in digital assets, including by providing a framework that market participants could use to evaluate whether digital assets are offered and sold as securities. In addition to these proactive engagement and modernization efforts, Mr. Hinman’s oversight of the Division’s core functions, including the disclosure review program, addressed a number of novel and complex issues leading to substantial benefits for investors.

“Bill’s leadership, expertise and commitment to our mission have benefited America’s investors tremendously. Whether through his work strengthening and increasing access to our public and private markets, modernizing disclosure requirements to reflect current drivers of value and risk, or responding to the onset of the global pandemic, Bill and his team in Corporation Finance have greatly improved our regulatory framework for investors as well as small, growing and established businesses,” said SEC Chairman Jay Clayton. “Bill is universally respected, both by his agency colleagues and by market participants and practitioners, and I’ve been fortunate to have him as a core member of the SEC leadership team these past several years.”

Mr. Hinman said “It has been an honor to work at the agency under Chairman Clayton’s leadership. And it has been an incredible privilege to work alongside the dedicated and talented staff of the Division of Corporation Finance whose professionalism, expertise and commitment to public service has been always evident and even more apparent in the extraordinary way the Division responded to the challenge of working remotely for the past eight months. Leading Corp Fin has been the highlight of my career.”

Mr. Hinman directed the Division’s initiatives in a number of significant areas:

Modernizing the offering process and enhancing investor protections

Throughout his tenure, Mr. Hinman remained focused on modernizing the offering process, including through addressing regulatory impediments in the registered offering process, while maintaining or enhancing investor protections. Mr. Hinman led the Commission’s work to extend to all companies the JOBS Act’s “test-the-waters” accommodation previously available only to emerging growth companies. Under Mr. Hinman’s leadership, the Division also expanded its policies to permit non-public review of all initial public offerings, as well as certain other offerings, and extended Division policies relating to the content of financial information that must be included in draft registration statements. As a result of the expansion of the non-public review process, the amount of time that it has taken for issuers to price their offerings after publicly posting their registration statements has dropped significantly.

Mr. Hinman’s leadership was critical to the Division’s efforts to simplify, harmonize and modernize the exempt offering framework to close the gaps that may impede access to capital for smaller companies, again while preserving important investor protections. Mr. Hinman also led the Commission’s work to revise conditions to investor participation in private offerings, moving away from income or wealth as the singular qualification for participation and recognizing that professional knowledge, experience or certification are suitable measures of financial acumen in today’s markets.

Improving disclosures to investors while reducing unnecessary compliance costs

Mr. Hinman led several initiatives designed to enhance the information available to investors, including through modernizing and updating the Commission’s disclosure requirements while reducing compliance costs where appropriate.  These efforts included appropriately tailoring public company regulatory requirements for smaller issuers, including by updating the Commission’s smaller reporting company and accelerated and large accelerated filer definitions.

Mr. Hinman has been steadfast in his efforts to use the Commission’s principles-based disclosure approach to improve disclosures available to investors, including by updating description of business requirements to provide for disclosures that are tailored to companies’ particular facts and circumstances. Mr. Hinman also oversaw the Commission’s efforts to amend “Management’s Discussion and Analysis” disclosures – amendments designed to modernize and enhance investor understanding while reducing company compliance efforts and costs. In addition, under Mr. Hinman’s leadership the Division issued guidance concerning the disclosure of self-identified board diversity characteristics and, more broadly, how boards implement any policies they follow with regard to the consideration of diversity in identifying director nominees.

Mr. Hinman also led the Division’s initiatives to update a range of rules relating to required financial information. These initiatives resulted in rule changes that streamlined the financial disclosure requirements in registered debt offerings, thereby promoting the ability of more debt offerings to be conducted on a registered (rather than unregistered) basis, as well as rules that simplify and improve financial disclosures about the acquisition and disposition of businesses.

Providing guidance on emerging issues

During Mr. Hinman’s tenure, the Division issued guidance on a number of emerging issues. For example, Mr. Hinman directed the Division’s monitoring of disclosure risks presented by companies operating in China, the pending replacement of LIBOR as a reference rate and the United Kingdom’s exit from the European Union (Brexit). In addition, under Mr. Hinman’s leadership, the Division led efforts to update issuer guidance related to the disclosure of cybersecurity risks and incidents. Mr. Hinman also oversaw the Commission’s response to a number of the issues that arose from the rapid innovation in digital assets, including leading the creation of the Strategic Hub for Innovation and Financial Technology, or FinHub, to engage with fintech industry participants and the development of a framework to assist market participants as they analyze whether a digital asset is offered and sold as a security subject to the federal securities laws.

In response to COVID-19 and resulting business and market disruptions, the Division published timely guidance on disclosure obligations companies should consider as they faced financial reporting challenges. In addition, Mr. Hinman joined Chairman Clayton in providing guidance to companies as they engaged in good faith attempts to provide appropriately framed forward-looking information to investors.

Under Mr. Hinman’s leadership, the Division also increased its focus on evolving and alternative offering structures, including direct listings, and enhanced its collaboration with market participants to address these issues. This increased focus and collaboration also included a range of important topics relating to business practices and corporate governance.

Modernizing and updating the proxy process

Mr. Hinman led the Division’s ongoing efforts to modernize and improve the efficiency and integrity of the proxy process. The Division’s work led to Commission rule changes designed to ensure that clients of proxy voting advice businesses receive more transparent, accurate and complete information as they make voting decisions. The Division’s work also led to rule changes to align the interests of shareholder-proponents and their fellow shareholders by updating the ownership and resubmission thresholds for inclusion of a shareholder proposal in a company’s proxy materials.

Prior to joining the SEC in May 2017, Mr. Hinman was a senior partner in the Silicon Valley office of Simpson Thacher & Bartlett LLP where he was a recognized leader in advising public and private companies in corporate finance matters. Prior to joining Simpson Thacher, Mr. Hinman was the managing partner of Shearman & Sterling’s San Francisco and Menlo Park offices. He received his B.A. from Michigan State University with honors and his J.D. from Cornell University Law School where he was a member of the Editorial Board of the Cornell Law Review. He is a member of the Bar Association of the State of California and the Association of the Bar of the City of New York. Mr. Hinman is also a fellow of the American Bar Foundation.

Upon Mr. Hinman’s departure, Shelley Parratt will serve as Acting Director of the Division of Corporation Finance. She currently serves as Deputy Director of the Division. Michele Anderson, currently Associate Director in the Division, will serve as Acting Deputy Director.