On August 17, the SEC adopted amendments intended to simplify and update the disclosure of information to investors and reduce compliance burdens for companies without significantly altering the total mix of information available to investors. The amendments are effective 30 days after their publication in the Federal Register.
The amendments eliminate certain:
- Redundant and duplicative requirements, which require substantially similar disclosures as GAAP, International Financial Reporting Standards (IFRS) or other SEC disclosure requirements.
- Overlapping requirements, which are related to, but not the same as GAAP, IFRS or other SEC disclosure requirements.
- Outdated requirements, which have become obsolete as a result of the passage of time or changes in the regulatory, business or technological environment.
- Superseded requirements, which are inconsistent with recent legislation, more recently updated SEC disclosure requirements, or more recently updated GAAP.
Most of the amendments involve technical amendments to Regulation S-X that relate to the topics mentioned in the four bullets above. For example, certain Regulation S-X and Regulation S-K items were amended to replace (or, in some cases, supplement) the existing references to “income statement” and variations thereof with “statement of comprehensive income” because the FASB has replaced the income statement with the statement of comprehensive income. However, there were also some substantive amendments that occurred outside the financial statements. The table below summarizes some of these other amendments:
|Item 101 of S-K (Description of business)||
(These disclosures largely were redundant with GAAP disclosures in the financial statements or with MD&A.)
|Item 201 of S-K (Market price of and dividends on the registrant’s common equity and related stockholder matters)||
|Item 303 of S-K, Management’s discussion and analysis of financial condition and results of operations||
|Item 503 of S-K, Prospectus summary and risk factors||
As a supplement to the adopting release, the SEC also issued a “demonstration version” document that redlined the rule amendments, with added text underlined and deleted text
If you have any questions regarding any of the topics covered in this blog post, please feel free to contact a member of our Corporate & Securities practice group or, if applicable, contact your primary Bass, Berry & Sims relationship attorney.