SEC Disclosure Requirements and the Regulation S-K Concept Release

SEC Disclosure Requirements and the Regulation S-K Concept Release- Today is the continuation in a Lawcast series discussing SEC disclosure requirements and in particular the 341 page Regulation S-K concept release and request for public comment issued by the SEC on April 15, 2016.

The Regulation S-K concept release touches on many topics. In the next few Lawcasts in this series I will give a brief summary of several of those topics.

First – Industry Guides – The SEC has issued five industry guides to assist companies in those particular industries in formulating effective disclosures. The five guides include: (i) bank holding companies; (ii) oil and gas programs; (iii) real estate limited partnerships; (iv) property casualty insurance underwriters; and (v) mining companies. The SEC seeks comment and discussion on the usefulness of such guides.

Second – Public Policy and Sustainability Matters – Over the years, the SEC has mandated disclosures related to public policy concerns. For example, there are rules related to disclosures on conflict minerals and resource extraction from foreign countries, environmental matters and other issues of social concern. The SEC seeks discussion and comment on the appropriateness of these requirements and whether they should be expanded or reduced.

Item 601 of Regulation S-K requires the filing of certain material contracts, corporate documents, and other information as exhibits to registration statements and reports. A particular area of discussion recently has been the need to file schedules to contracts. These schedules can be lengthy and lack materiality. Likewise, a recent area of discussion has been the necessity of filing an immaterial amendment to a material exhibit. The S-K Concept Release contains a lengthy discussion on Exhibits, including drilling down on specific filing requirements. Many of the exhibit filing requirements are principle-based, including, for example, quantitative thresholds for contracts. Consistent with the rest of the S-K Concept Release, the SEC discusses whether these principle-based, quantitative standards should be changed to the materiality approach. The SEC also discusses eliminating some exhibit filing requirements altogether, such as where the information is otherwise fleshed out in financial statements or other disclosures (for example, a list of subsidiaries).

An interesting topic that has come up previously is the frequency of reporting. Currently the SEC Reporting Requirements require the filing of a quarterly Form 10-Q, annual 10-K and periodic Form 8-Ks. The S-K Concept Release discusses and seeks comment on the necessity of a quarterly Form 10-Q and whether it should be eliminated or made voluntary. The SEC seems to lean towards fewer reports, especially for smaller reporting companies. I note that the Regulation A+ reporting requirements are only twice a year.

Laura Anthony, Esq.
Founding Partner
Legal & Compliance LLC.
330 Clematis Street, Ste. 217
West Palm Beach, FL 33401

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