As we’ve previously blogged, in November 2020, the Securities Exchange Commission (SEC) adopted amendments to the Regulation S-K items related to Management’s Discussion and Analysis (MD&A) as well as certain selected financial disclosures. The amendments became effective on February 10, 2021 (effective date) but registrants were not required to apply the amended rules until their first filing related to their fiscal year ending on or after August 9, 2021 (mandatory compliance date).
As a result, compliance with these amendments will be required for most calendar-year companies beginning with the Annual Report on Form 10-K for the fiscal year ending December 31, 2021. However, companies with fiscal years that ended September 30, 2021, will be required to comply with the new rules in their upcoming 10-K. Registrants will also be required to apply the amended rules in a registration statement and prospectus that on its initial filing date is required to contain financial statements for a period on or after the mandatory compliance date.
While many issuers voluntarily early adopted the amendments covering Items 301 and 302 during this last 10-K reporting cycle, based on our experience a large number of registrants chose not to early adopt the amendments to Item 303 of Regulation S-K, relating to the MD&A section, because of the short time period after their adoption before the first 10-K. As a result, this fall will be an ideal time for many companies to analyze what impacts the new rules will have on their upcoming MD&A.