Even though the SEC did not have an open meeting to consider its new proposal to amend Rules 3-10 and 3-16 of Reg S-X (see this PubCo post), Commissioner Kara Stein decided nonetheless to release a public statement about the proposal. While she voted in favor of issuing the proposal, she had some serious reservations.
SEC proposes to amend financial disclosure rules related to guaranteed or collateralized debt securities
Yesterday, the SEC voted to propose new amendments to Rules 3-10 and 3-16 of Reg S-X intended to streamline the financial disclosure rules related to registered debt offerings that involve guaranteed or collateralized securities. The proposed amendments to Rules 3-10 and 3-16 are “intended to provide investors with material information given the specific facts and circumstances, make the disclosures easier to understand, and reduce the costs and burdens to registrants.” Chair Jay Clayton is quoted in the press release as having “seen firsthand instances in which an issuer did not pursue SEC registration of a debt offering that included a subsidiary guarantee or pledge of affiliate securities as collateral because of the costs and, in particular, time burdens of these rules….The proposed rules are intended to make the disclosures easier for investors to understand and to encourage these offerings to be conducted on a SEC-registered basis.”