SEC Adopts Amendments to Simplify and Update Disclosure Requirements

The Securities and Exchange Commission today announced that it has voted to adopt amendments to certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other Commission disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP), or changes in the information environment.  

The amendments are intended to simplify and update the disclosure of information to investors, including long-term Main Street investors, and reduce compliance burdens for companies without significantly altering the total mix of information available to investors.

"It is important to review our regulations to ensure that they evolve along with our capital markets and remain effective and efficient," said SEC Chairman Jay Clayton. "Today's amendments are an example of how thoughtful reviews can prompt changes for the benefit of investors, public companies, and our capital markets."

The Commission is also referring certain disclosure requirements that overlap with, but require information incremental to, GAAP to the Financial Accounting Standards Board (FASB) for consideration for potential incorporation into GAAP.

The amendments will be effective 30 days from publication in the Federal Register.

FACT SHEET

The Securities and Exchange Commission voted to adopt amendments to certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other Commission disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP), or changes in the information environment. The Commission is also referring certain disclosure requirements that overlap with, but require information incremental to, GAAP to the Financial Accounting Standards Board (FASB) for consideration for potential incorporation into GAAP.

Background

The amendments are part of an initiative by the Division of Corporation Finance to review disclosure requirements applicable to issuers to consider ways to improve the requirements for the benefit of investors and issuers. The amendments are also part of the Commission's efforts to implement the Fixing America's Surface Transportation (FAST) Act, which, among other things, requires the Commission to eliminate provisions of Regulation S-K that are duplicative, overlapping, outdated, or unnecessary.

Highlights 

These amendments apply primarily to public reporting companies (including foreign private issuers). Some of the amendments also apply to other entities the Commission regulates, including Regulation A issuers, investment advisers, investment companies, broker-dealers, and nationally recognized statistical rating organizations. 

The amendments would eliminate certain:

• Redundant and duplicative requirements, which require substantially similar disclosures as GAAP, International Financial Reporting Standards (IFRS), or other Commission disclosure requirements.  
• Overlapping requirements, which are related to, but not the same as GAAP, IFRS, or other Commission disclosure requirements.
• Outdated requirements, which have become obsolete as a result of the passage of time or changes in the regulatory, business, or technological environment.
• Superseded requirements, which are inconsistent with recent legislation, more recently updated Commission disclosure requirements, or more recently updated GAAP.  

What’s Next?

The amendments will be effective 30 days from publication in the Federal Register.