SEC Votes to Modernize Disclosures Under Regulation S-K



The Securities and Exchange Commission voted to propose rule amendments to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K.

The proposed amendments are intended to update the rules to improve disclosures for investors and to simplify compliance efforts for registrants.

“The world economy and our markets have changed dramatically in the more than 30 years since the adoption of our rules for business disclosures by public companies. Today’s proposal reflects these significant changes, as well as the reality that there will be changes in the future,” said SEC chairman Jay Clayton. “I applaud the staff for their efforts to modernize and improve our disclosure framework, including recognizing that intangible assets, and in particular human capital, often are a significantly more important driver of value in today’s global economy. The proposals reflect a thoughtful mix of prescriptive and principles-based requirements that should result in improved disclosures and the elimination of unnecessary costs and burdens.

“We invite further engagement from market participants on these proposals and any other areas where our approach to ensuring investors have the appropriate mix of information to make investment decisions can be improved. Many members of our staff contributed to this effort, including Bill Hinman, Betsy Murphy, Felicia Kung, Lisa Kohl, Elliott Staffin, Sandra Hunter Berkheimer, and Shehzad Niazi in the Division of Corporation Finance; S.P. Kothari, Narahari Phatak, Tanakorn Makaew, and Vladimir Ivanov in the Division of Economic and Risk Analysis; and Laura Jarsulic, Bryant Morris and Dorothy McCuaig in the Office of the General Counsel.”

The proposal will have a 60-day public comment period following its publication in the Federal Register.

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