Worldwide: Governance & Securities Law Focus - November 2018/Latin America


SEC and NYSE/Nasdaq Developments

SEC Adopts Amendments to Simplify and Update Disclosure Requirements

On August 17, 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(SEC) adopted amendments to simplify and update disclosure requirements that have become duplicative, overlapping or outdated in light of other SEC disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP) or "changes in the information environment."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 November 5, 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:

SEC Proposes Rules to Simplify and Streamline Disclosures in Certain Registered Debt Offerings

On July 24, 2018, in line with its efforts to ease disclosure and capital formation obligations applicable to public companies while ensuring that investors have access to material information, the SEC proposed rule amendments that would simplify the financial disclosure requirements for registered debt offerings with regard to guarantors and issuers of guaranteed securities, as well as for affiliates whose securities collateralize a registrant's securities. The SEC is proposing to amend Rules 3-10 and 3-16 of Regulation S-X and relocate part of Rule 3-10 and all of Rule 3-16 to new Article 13 in Regulation S-X, which would comprise proposed Rules 13-01 and 13-02.

Proposed Amendments to Rule 3-10:

  • As proposed, Rule 3-10 would continue to permit the omission of separate financial statements of subsidiary issuers and guarantors, provided that certain conditions are met and the parent company provides supplemental financial and non-financial disclosure about the subsidiary issuers and/or guarantors and the guarantees. The requirements regarding disclosures would be provided by proposed Rule 13-01, which would principally:

    • require that subsidiary issuers or guarantors be consolidated in the parent company's consolidated financial statements rather than be 100% owned by the parent company, as is currently required;
    • replace condensed consolidating financial information as required under the current rule with certain proposed financial and non-financial disclosures: (i) the financial disclosures would consist of summarized financial information of the issuers and guarantors, which may be presented on a combined basis, and reduce the number of periods presented, and (ii) the non-financial disclosures would expand the qualitative disclosures regarding the guarantees and the issuers and guarantors, as well as require disclosure of additional information that would be material to holders of the guaranteed security; and
    • allow the disclosures to be provided outside the footnotes contained in the parent company's financial statements in the registration statement covering the offer and sale of the subject securities and any related prospectus, as well as in certain Exchange Act reports filed shortly thereafter.

Proposed Amendments to Rule 3-16:

  • In line with the SEC's view that separate financial statements of affiliates whose securities are pledged as collateral are not material in most situations, the proposed amendments to Rule 3-16 would notably:

    • replace the current requirement to provide separate financial statements with regard to each affiliate whose securities are pledged as collateral with financial and non-financial disclosures about the affiliate(s) and the collateral arrangement as a supplement to the consolidated financial statements of the registrant that issues the collateralized security; and
    • permit the proposed financial and non-financial disclosures to be located in filings in the same manner as described above for the disclosures related to guarantors and guaranteed securities.

The SEC press release announcing the proposed rule is available at:

To view the full article, please click here

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions