On 17 August 2018, the U.S. Securities and Exchange Commission (SEC) adopted amendments to simplify and update disclosure requirements that have become duplicative, overlapping or outdated in light of other SEC disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP) or "changes in the information environment." The amendments affect annual reports on Form 20-F, as well as registration statements on Form F-1, Form F-3 and Form F-4.

The noteworthy changes affecting foreign private issuers include:

  • Exchange Rate Data. Form 20-F will no longer require foreign private issuers to provide exchange rate data when financial statements are prepared in a currency other than the U.S. dollar as such data is widely available. This change also affects registration statements on Form F-1 and Form F-4, which currently refer to the same disclosure requirement in Form 20-F.
  • Earnings Per Share Calculation. The requirement to file as an exhibit a statement explaining how any earnings per share information presented in a filing was calculated has been eliminated. This change affects annual reports on Form 20-F, as well as registration statements on Form F-1, Form F-3 and Form F-4.
  • Ratio of Earnings to Fixed Charges. The amendments eliminate the requirement to include historical and pro forma ratios of earnings to fixed charges and the related exhibit when registering debt securities or preferred stock. GAAP already covers disclosure of the components commonly used to calculate these ratios, and the SEC recognizes that debt investors are more focused on the information readily available from the financial statements and EBITDA or similar metrics. These amendments are implemented through the changes to Instruction 7 of "Instructions as to Exhibits" to Form 20-F, as well as in registration statements on Form F-1, Form F-3 and Form F-4 through amendments to Items 503(d) and 601(b)(12) of Regulation S-K.
  • Eliminate Trading Price History. Companies with common equity traded in an established trading market no longer need to disclose high and low trading prices for each quarter in the last two full fiscal years and interim periods, given that such information is easily accessible to investors, so long as the company's trading symbol and principal trading markets are disclosed. Additionally, issuers with common equity that is not traded on an exchange are required to indicate, as applicable, that any over-the-counter quotations reflect inter-dealer prices and may not necessarily represent actual transactions. These changes affect annual reports on Form 20-F, as well as registration statements on Form F-1, Form F-3 and Form F-4, which refer to Item 9.A.4 of Form 20-F.
  • Research and Development Expenditures. Companies will no longer be specifically required to disclose research and development expenditures, since such information is already required in the notes to the financial statements. However, companies should continue to consider whether disclosure regarding research and development expenditures is appropriate in the context of describing material trends in the "Operating and Financial Review and Prospects" section. These amendments are implemented through changes to Item 5.C of Form 20-F, as well as in registration statements on Form F-1 and Form F-4, which refer to Item 5.C of Form 20-F.
  • Dividend Restrictions. Requirements to disclose any dividend restrictions and any limitations on the payment of dividends have been eliminated through changes to Items 10.F and 14.B of Form 20-F, namely because foreign private issuers are already required to disclose dividend restrictions in the financial statements.
  • Invitation for Competitive Bids. The requirement to file as an exhibit any invitation for competitive bids has been eliminated, because it was deemed that such information would be of little interest to investors. This change is implemented through an amendment to Item 601(b)(26) of Regulation S-K, which is incorporated by reference into registration statements on Form F-1, Form F-3 and Form F-4.
  • Age of Financial Statements in IPOs. In IPOs, foreign companies doing an SEC-registered offering have had to include in their registration statement audited financial statements not older than 12 months at the date of filing. Under the new rules, companies may include audited financials that are no older than 15 months at the time of the offering or listing, if the company represents that it is not required to comply with the 12-month age requirement in its home jurisdiction and that complying would be impracticable or involve undue hardship. Companies are no longer required to obtain a waiver from the SEC.

The amendments will become effective on 5 November 2018. In advance of upcoming filing deadlines, companies are advised to understand how to reflect such changes in their public reporting and in new registration statements and update their procedures accordingly.

To assist with understanding the amendments that were adopted, the SEC prepared a "demonstration version" of the adopted amendments, which presents the added and deleted text in the affected rules. The SEC's demonstration version is available at:

The SEC final rule release adopting the amendments is available at:

Our related client publication is available at:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.