With the close of the first quarter and earnings releases and investor calls around the corner, senior leadership at the Securities and Exchange Commission is pushing for full disclosure transparency regarding impact of the coronavirus pandemic.
Chairman Jay Clayton and Division of Corporation Finance Director William Hinman issued a joint public statement Wednesday stressing the importance of disclosure to protecting investors and maintaining market integrity. “We urge companies to provide as much information as is practicable regarding their current financial and operating status, as well as their future operational and financial planning,” the duo stated.
The SEC published guidance late last month regarding its stance on coronavirus disclosure, in which it noted the importance of timely, robust, and complete information as to the business impacts of the pandemic. The Commission acknowledged risks and impact “should be specific to a company’s situation.”
Specifically, Clayton and Hinman believe company disclosures should respond to investor interest in:
- Where the company stands today, operationally and financially;
- How the company’s response, including its efforts to protect the health and well-being of its workforce and its customers, is progressing; and
- How its operations and financial condition may change as efforts to fight coronavirus progress.
The SEC leaders believe the payoff such transparency “will not only provide benefits to investors and companies, it also will enhance valuable communication and coordination across our economy—including between the public and private sectors—as together we pursue the fight against COVID-19.”
Clayton and Hinman note their expectation that “good faith attempts to provide appropriately framed forward-looking information” will not be second guessed by the SEC. “We appreciate that in many cases actual financial and operational results may differ substantially from what would now appear to be reasonable estimates,” the statement reads.
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