The Securities and Exchange Commission has voted to adopt amendments that are intended to “modernize and simplify disclosure requirements for public companies, investment advisers, and investment companies.”
The amendments to certain disclosure requirements in Regulation S-K, and related rules and forms, are intended to improve the readability and navigability of company disclosures and discourage repetition and immaterial information.
“These amendments are expected to benefit investors by eliminating outdated and unnecessary disclosure and making it easier for them to access and analyze material information,” the Commission said in a statement Wednesday that announced the amendments.
The amendments are consistent with the Commission’s mandate under the Fixing America’s Surface Transportation (FAST) Act and are based on recommendations that have emerged with a broader, ongoing review of the disclosure rules. Specifically, the amendments will, among other things, increase flexibility in the discussion of historical periods in Management’s Discussion and Analysis, allow companies to redact confidential information from most exhibits without filing a confidential treatment request, and incorporate technology to improve access to information on the cover page of certain filings.
The changes also allow for parallel amendments to several rules and forms applicable to investment companies and investment advisers, including amendments that require certain investment company filings to include a hyperlink to each exhibit listed in the exhibit index of the filings and be submitted in HyperText Markup Language (HTML) format.
“The amendments adopted today demonstrate our focus on modernizing our disclosure system to meet the expectations of today’s investors while eliminating unnecessary costs and burdens,” SEC Chairman Jay Clayton said in a statement.
Amendments relating to the redaction of confidential information in certain exhibits will become effective upon publication in the Federal Register. The rest of the amendments will be effective 30 days after they are published in the Federal Register, with the exception of requirements to tag data on the cover pages of certain filings (they are subject to a three-year phase-in), and the requirement that investment company filings be made in HTML format and use hyperlinks (these will be effective for filings on or after April 1, 2020)