The Securities and Exchange Commission is seeking public comment on the effectiveness of financial disclosure requirements in Regulation S-X.
The request for comment, part of the Commission’s Disclosure Effectiveness Initiative, focuses on financial disclosures companies must file with the Commission about acquired businesses, affiliated entities, and guarantors and issuers of guaranteed securities. The SEC hopes to assess how Regulation S-X requirements, largely the same for many years, are used by investors and whether there are challenges faced by registrants.
Among the questions posed:
Are there requirements that result in disclosures that investors do not consider useful? What changes to these requirements would make them useful or should the SEC consider eliminating or replacing all or part of those requirements?
Should the SEC modify the amount of time that registrants have to provide disclosures about acquired businesses to investors?
Should certain registration statements continue to require accelerated and additional disclosure as compared to the Form 8-K requirements?
Are significance tests the appropriate means to determine the nature, timing, and extent of disclosure under Rule 3-05 and the related requirements?
Should the SEC allow registrants to apply more judgment in determining what is considered a significant acquisition?
Should the Commission consider requiring foreign private issuers to provide disclosures similar to those provided by domestic companies when reporting on Form 8-K?
Should smaller reporting companies and emerging growth companies be subject to the same requirements or should requirements for those registrants be scaled? If they should be scaled, in what way?
A full list of questions pertaining to Regulation S-X rules can be found here. The public comment period will remain open for 60 days following publication of request in the Federal Register.