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Labor Union Wants More Disclosures on Business Acquisitions

In recent comment letters concerning the Securities and Exchange Commission’s (“SEC”) Disclosure Effectiveness program, Unite Here! has asked for additional disclosures about pending company acquisitions. Responding to Release No. 33-9929, Request for Comment on the Effectiveness of Financial Disclosures About Entities Other Than the Registrant, the 250,000-member labor union said that Rule 3-05 of Regulation S-X does not require businesses to give sufficient information suitable for making an informed decision.

Disclosure requirements depend on the size of the business acquisition, and Rule 1-02(w) of Regulation S-X details what is significant for financial information. United Here! suggests lowering the threshold of what is considered “significant” under the current three tests (investments, assets, and income) to 10 percent, if the public company and the business being acquired are associates under the same parent company.

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