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U.S. Securities and Exchange Commission

Speech by SEC Commissioner:
Statement at SEC Open Meeting Regarding Proposing Release on Short Term Borrowings Disclosure and Guidance on Presentation of Liquidity and Capital Resources Disclosures in MD&A


Commissioner Kathleen L. Casey

U.S. Securities and Exchange Commission

Washington, D.C.
September 17, 2010

I join the Chairman in thanking the Staff of the Division of Corporation Finance for its good work on the Proposing Release and the Guidance on MD&A before us today. I would also like to thank the other Divisions and Offices that contributed to these releases.

As the Chairman, Meredith and Christine have already discussed, we are proposing rules that would expand and enhance the quantitative data about short-term borrowings that bank holding companies currently provide, apply this disclosure requirement to all registrants that are required to provide MD&A, and require a qualitative discussion of these data in registrants' MD&A.

Because short-term financing arrangements can fluctuate significantly within a reporting period, investors may benefit from expanded disclosures that would provide a better understanding of the extent and nature of a company's use of, and reliance upon, short-term borrowings. In particular, increased information about a company's short-term borrowings may enable investors to assess a company's ability to weather a disruption in access to these sources of liquidity.

The financial crisis highlighted the importance to investors of information about companies' liquidity constraints. While our current rules require disclosure and discussion relating to a company's liquidity, capital resources and short- and long-term contractual obligations, I believe our rules can be improved to ensure that investors have access to information relating to short-term borrowings that would be important to their investment decisions.

Our proposal today provides a good starting point for considering how to improve companies' disclosures of short-term borrowings, and I look forward to reviewing comments from investors, issuers and other market participants about how these proposals can be improved. In particular, the release presumes that the robust proposed short-term borrowings disclosure and discussion will be valuable to investors with respect to financial companies and non-financial companies alike, but the release contains extensive questions on both the value of these additional disclosures to investors and the costs and burdens of providing them. As always, I will be keenly interested in comments regarding whether we have properly balanced these considerations.

In addition to the Proposing Release, we are providing Guidance today on the Presentation of Liquidity and Capital Resources Disclosure in MD&A. I hope that this Guidance will promptly lead to improved transparency into the liquidity and funding risks facing registrants and, in turn, better-informed investment decisions by investors.

Thanks once again to the staff, especially Christine, Paula, Felicia, Meredith, Wayne and Stephanie, for their excellent work on these releases. I have no questions.


Modified: 09/17/2010