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Disclosure Effectiveness–Getting a Jump on the SEC’s New Initiative

    Client Alerts
  • November 05, 2014

As mandated by the JOBS Act, the SEC is in the midst of a major reassessment of its disclosure rules and practices. For example, in December 2013, the Division of Corporation Finance released its “Report on Review of Disclosure Requirements in Regulation S-K.” The report identifies certain areas of disclosure that the staff believes should be considered for further review and modernization.

More recently, Keith Higgins, Director of Corporate Finance, spoke to the ABA Business Law Section on the SEC’s initiatives in this area. He described the report as a “springboard” for updating Regulations S-K and S-X in hopes of reducing company disclosure costs and providing more effective disclosure to investors. The staff also intends to consider methods of disclosure, including the latest technology, structured data, hyperlinks and the like.

If this initiative moves with the speed of similarly comprehensive past projects, none of us may live to see its completion. To be fair, however, something like this is a huge undertaking and needs to be done correctly, with proper consideration of both company and investor perspectives. So, a reasonable amount of patience is appropriate.

In the meantime, Mr. Higgins suggests that companies can, and should, take the following steps to provide better disclosure under the existing rules:

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