As part of their Disclosure Effectiveness Initiative, the Securities and Exchange Commission (SEC) recently proposed interpretive guidance to eliminate some disclosures in Regulation S-K and to amend other requirements to better focus on material information in Item 303, “Management’s Discussion and Analysis.”

United States flag standing in front of a stone capitol building; image used for blog post about SEC proposal to change Regulation S-K

More specifically, the SEC’s proposal would eliminate duplicative disclosures and modernize “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” (known as MD&A) to benefit investors and to simplify compliance for issuers. The proposed amendments are part of a comprehensive evaluation of the SEC’s disclosure requirements intended to improve the SEC’s overall disclosure regime. Specifically, the proposed amendments would eliminate Item 301 of Regulation S-K, “Selected Financial Data,” and Item 302 of Regulation S-K, “Supplementary Financial Information,” as the information is largely duplicative of other requirements.


Continue Reading

On January 30, 2020, Chairman of the Securities and Exchange Commission (SEC), Jay Clayton, released a public statement, “Proposed Amendments to Modernize and Enhance Financial Disclosures; Other Ongoing Disclosure Modernization Initiatives; Impact of the Coronavirus; Environmental and Climate-Related Disclosure.”

frontal view of a stone building with pillars and American flags; image used for blog post about SEC Chairman Public Statement

Clayton’s statement discusses these four topics:


Continue Reading

As part of its Disclosure Effectiveness Initiative of the Division of Corporation Finance, the SEC, in Final Rulemaking Release No. 33-10532, Disclosure Update and Simplification, has adopted amendments to certain of its disclosure requirements that are redundant or outdated or that overlap with, or have been superseded by, other SEC disclosure requirements — disclosures required by United States generally accepted accounting principles (“U.S. GAAP”) or those required by International Financial Reporting Standards (“IFRS”). The objective of the amendments is to facilitate disclosure of information to investors and to simplify compliance without significantly altering the total mix of information provided.

The amendments are also in response to a provision of the Fixing America’s Surface Transportation Act (FAST Act), which mandates the SEC to eliminate provisions of Regulation S-K that are no longer deemed necessary.

“It is important to review our regulations to ensure that they evolve along with our capital markets and remain effective and efficient,” said SEC Chairman Jay Clayton. “Today’s amendments are an example of how thoughtful reviews can prompt changes for the benefit of investors, public companies, and our capital markets.”

Additionally, the SEC is referring to the Financial Accounting Standards Board (“FASB”) for potential incorporation into U.S. GAAP certain disclosure requirements that overlap with U.S. GAAP but that call for incremental information. For the time being, pending subsequent action by the FASB, such incremental disclosures are being retained. The SEC has requested, however, that, within the ensuing 18 months, the FASB determine whether (and which of) the referred disclosure items will be added to its standard-setting agenda. The SEC notes that the incorporation of any of its incremental disclosure requirements into U.S. GAAP could potentially affect all entities that prepare financial statements in accordance with U.S. GAAP, including Regulation A issuers, smaller reporting companies, and non-public entities.


Continue Reading