SEC Lightens Disclosure Requirements for Public Companies

August 24, 2018

As part of its Disclosure Simplification initiative, the Securities and Exchange Commission (“SEC”) has published a rule to reduce a public company’s disclosure requirements. Issued as Release No. 33-10532, Disclosure Update and Simplification, the final amendments will help public companies with their regulatory reporting without denying investors of information beneficial to their investment-making decisions. The changes aim to implement the provisions under Section 72002(2) of the Fixing America’s Surface Transportation Act and mostly follow the proposed versions published under Release No. 33-10110, Disclosure Update and Simplification.

The changes will be effective 30 days after their publication in the Federal Register. Meanwhile, the SEC hopes the Financial Accounting Standards Board (“FASB”) will review its disclosure rules that correspond with U.S. GAAP to determine if the board’s standards need to be updated to reflect any similarities in the rules. The SEC outlines in Release No. 33-10532 which rules the FASB should review, and the market regulator wants the board to state within the next 18 months whether it will undertake standard-setting projects for the overlapping requirements.