SEC to Update and Remove Unnecessary Disclosure Requirements

By | 11/21/2018 | 2:45 am ET

The Securities and Exchange Commission (SEC) voted in August to adopt amendments designed to simplify and update disclosure requirements. These amendments were aimed to get rid of disclosure requirements that appeared to be duplicative, overlapping, or outdated. These amendments are designed to ease regulatory burdens on issuers, while facilitating disclosure to investors. The amendments became effective on November 5 2018.

These amendments are part of a broader initiative from the Division of Corporation Finance, a branch of the SEC, to review and update disclosure requirements in an attempt to improve them to benefit both investors and issuers. The amendments also align with the Fixing America’s Surface Transportation Act (FAST), which require the SEC eliminate duplicative, outdated, or otherwise unnecessary provisions.

Some highlights from the amendments are:

Duplicative or Overlapping Requirements:

Several portions of Regulation S-X, S-K, and Form 20-F will be eliminated, in order to eliminate redundancies resulting from similar US GAAP, IFRS, and other SEC disclosure requirements. None of the underlying disclosure obligations will be changed as a result of these eliminations.

  • Items 101(c)(1)(xi) and 101(h)(4)(x) of Regulation S-K were deleted. These areas related to disclosure for the amounts that were spent on research and development, which are similar to the disclosure requirements required by US GAAP.
  • Items 503(d) and 601(b)(12) of Regulation S-K and Instruction 7 to Form 20-F were deleted. These requirements and instructions were similar to those required by both the US GAAP And IFRS.

Outdated Requirements:

Due to improvements in technical and information environments, the SEC has deemed several disclosure requirements unnecessary.

  • Foreign Currency Exchange Rate: Previously, the SEC required that foreign issuers provide information about the currency exchange rate. Due to how readily this information is now available, they have deemed this requirement unnecessary.
  • SEC Website Data: Issuers were previously required to disclose the SEC’s web address with a statement that electronic SEC filings are available, in addition to their own website address if one existed. Due to technological advancements, this requirement has been deemed outdated.

Colonial Filings is available to help with any of your reporting requirement needs. Contact us to learn more.

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