November 23, 2015
1. Rule 3-05: Disclosure regarding financial statements of businesses acquired or to be acquired
Acquistions have a major impact on the registrant, both at the organizational level as well as on the balance sheet/overall financials of the company.. Details of the acquiree company in terms of proforma results can be of immense use to investors bringing in greater transparency regarding future business performance. For the registrant, the level of difficulty in preparing these documents will not be a huge overhead as they themselves look at this information before acquiring. The acquiree company has to provide the entire information to the registrant before acquisition
2. Rule 3-09: Separate financial statements of subsidiaries not consolidated and 50 percent or less owned persons
As listed above, there are several disclosure reporting challenges that registrants face while reporting information on equity-based investees..Hence, the difficulty and costs involved in preparing such reports is high. However, summarized report submission on all the investees instead of individual reports can help cut the cost and time while providing relevant information to investors.
3. Rule 3-10 :Financial statements of guarantors and issuers of guaranteed securities: registered or being registered
Again, there is enormous amount of time and cost involved in reporting details as required by rule 3-10. Therefore there is a need to revisit this rule in understanding what information is important from an investors perspective and to simplify the reporting as per the condensed consolidated financial information.
4. Rule 3-16: Financial statements of affiliates whose securities collateralize an issue registered or being registered
Practically speaking, the provision of collateral arrangements may limit the amount of collateral provided. Secondly, there could be lot of confusion arising in case of parent and multiple subsidiary collateral arrangements in terms of order of fulfilling