Regulatory Alerts2020-03-26
Clarification on Prohibition of Gifts at General Meetings (AGMS/EGMS)
The Securities and Exchange Commission has clarified Rule 602(4) to exempt light refreshments from the prohibition on distributing gifts at Annual and Extra-Ordinary General Meetings. This directive requires public companies to distinguish standard refreshments from formal gifts when distributing items to shareholders, observers, and other attendees. The clarification provides operational certainty for meeting organizers while preserving the original regulatory intent to prevent excessive gift distributions.
March 03, 2020 The Securities and Exchange Commission wishes to clarify the application of Rule 602 (4) of its Rules and Regulations. Rule 602(4) states that ‘’ public companies shall not distribute gifts to shareholders, observers and any other person at Annual General Meetings/Extra-Ordinary General Meetings’’ The Commission considers it necessary to clarify that ‘’ light refreshment’’ are not construed as ‘’ gifts ’’. Signed Management