More Regulation S-K and S-X Proposed Amendments
Posted by Laura Anthony, Esq. on November 22, 2017
More Regulation S-K and S-X Proposed Amendments- Today I am continuing summarizing the rule amendments proposed by the SEC on July 13, 2016, which rules are slated for action this year. As part of the proposed Regulation S-K and Regulation S-X Amendments, the SEC has identified disclosure requirement that have become obsolete as a result of time, regulatory, business or technological changes. The Regulation S-K and S-X Amendments propose to amend and sometimes add, but not delete, disclosure as a result of outdated requirements.
Again, most of the outdated requirements are technical (for example, income tax disclosures) in nature and beyond the scope of this blog. Some are common sense; for example, a reference to information being available in the SEC public reference room would be amended to include only a reference to the SEC Internet address for EDGAR filings.
Another common-sense change is the proposal to eliminate the requirement to post the high and low bid or trading prices for each quarter for the prior two fiscal years in an annual 10-K. The SEC reasons that the daily market and trading prices of a security are readily available on a number of websites. Moreover, these websites allow for the download and collation of trading prices over periods of time and provide much more robust information than currently contained in a 10-K.
The constant change in accounting and disclosure requirements and regulations have created inconsistencies in Regulation S-K and S-X. The SEC has gone through and proposed amendments to eliminate such inconsistencies. For example, certain provisions in Regulation S-X still refer to development-stage companies, a concept that was eliminated by FASB in June 2014.
The SEC also took this opportunity to clean up some nonexistent or incorrect references that resulted from regulatory changes over time.
In the next LawCast in this series, I will go over a high level history of the SEC Disclosure Effectiveness Initiative.