SEC votes to modernize Reg S-K requirements for business, legal proceedings and risk factor disclosures
At an open meeting this morning, the SEC voted (three to two) to adopt amendments, substantially as proposed, to modernize the Reg S-K disclosure requirements related to the descriptions of business, legal proceedings and risk factors. As Chair Jay Clayton observed in his Statement, these Reg S-K disclosure items “essentially have not changed in over 30 years,” but much has changed in our economy since that time, making these updates well warranted. The changes are a component of the SEC’s Disclosure Effectiveness Initiative and reflect public comments on the SEC’s 2016 Concept Release (see this PubCo post) and the 2019 proposal (see this PubCo post)—although the extent to which those comments were taken into account was subject to some debate, as discussed below—as well as learning from the staff’s disclosure review process. As described in the press release, the amendments mainly adopt a “principles-based, registrant-specific approach to disclosure” that is intended to elicit information “on a basis consistent with the lens that management and the board of directors use to manage and assess the registrant’s performance.” The amendments are also intended to discourage repetition, reduce disclosure of information that is not material and simplify compliance. While there are changes throughout, the most significant change is the enhancement of the disclosure requirement for human capital, a topic that has been front-burnered by the impact of COVID-19 on the workforce. The amendments will become effective 30 days after publication in the Federal Register.
Most of the SEC’s new disclosure simplification rules will become effective tomorrow. With that in mind, check out this Cooley Alert: SEC Adopts Final Rules to Modernize and Simplify Regulation S-K.
by Cydney Posner The SEC has posted a request for comment on some of the Reg S-K disclosure requirements that were not specifically covered in the Reg S-K Concept Release, issued earlier this year (see this PubCo post), which assessed the Reg S-K business and financial disclosure requirements. This release […]
by Cydney Posner In her statement at the SEC open meeting to vote on issuing the “Disclosure Update and Simplification Proposing Release,” SEC Commissioner Kara Stein protested that “this proposal may be framed in such a hyper-technical way that it fails to provide a bona fide opportunity for a wide […]
by Cydney Posner At an open meeting this morning, the SEC (all three of them) voted to issue a concept release seeking comment on modernizing certain business and financial disclosure requirements in Reg S-K, part of the SEC’s disclosure effectiveness review project. Reg S-K is 30 years old, and evolving […]
by Cydney Posner This week, the House passed the “Disclosure Modernization and Simplification Act of 2014.” Among other things, the bill would require the SEC: To adopt regs to permit issuers to submit a summary page to the Form 10-K that cross-references to the related material contained in the Form […]