On 13 April 2016, the US Securities and Exchange Commission ("SEC") issued a concept release seeking public comment on modernising certain business and financial disclosure requirements in Regulation S-K. The concept release seeks comment on 340 questions organised around three broad topics: (i) the disclosure framework of Regulation S-K; (ii) the specific business and financial requirements of Regulation S-K; and (iii) the presentation and delivery of disclosure in periodic reports.
The concept release reviews the current line item requirements of Regulation S-K that relate primarily to core company business information, company performance, financial information (other than financial statements) and future prospects and risk management. The release does not address executive compensation or corporate governance, but SEC Chair Mary Jo White has made clear that these topics will be part of the SEC staff's future review of disclosure effectiveness.
The SEC is seeking feedback on whether disclosure of public policy and sustainability matters (i.e., environmental, social and governance concerns) are important to investors and thus should be disclosed by SEC reporting companies as material information.
The concept release also delves into whether the scaled disclosure requirements ought to be extended in an effort to reduce the burden and costs of disclosure compliance on smaller companies.
Notably, the SEC's concept release raises the question of whether quarterly reporting for US domestic issuers on Form 10-Q should be discontinued, or, in the alternative, whether quarterly reporting should be eliminated for smaller reporting companies and replaced with semi-annual reports.
The deadline for submitting comments on the concept release is 21 July 2016.
For the full list of topics seeking public comment, please see the official SEC concept release here:
https://www.sec.gov/rules/concept/2016/33-10064.pdf
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