SEC Flash Report - July 2016

July 2016

SEC Issues Interim Final Rule Covering Voluntary Summaries in Form 10-Ks

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On June 1, the SEC issued an interim final rule to implement a provision of the Fixing America’s Surface Transportation (FAST) Act.[1] The adopting release is available here on the SEC’s website. 
The rule adds Item 16 to Form 10-K and specifically permits issuers to voluntarily include a summary in Form 10-K.  If an issuer elects to provide a summary, each item within the summary must include a cross-reference via hyperlink to the related, more detailed disclosure in Form 10-K.  Registrants have historically been permitted to voluntarily provide information, such as a summary, but the FAST Act required SEC rulemaking to specifically permit the summary and require the use of cross-referencing. 
Item 16 provides registrants with flexibility in preparing the summary and does not specify the summary’s length (other than to say it should be brief), location, or disclosure items that should be covered.  The summary may only cross-reference information or exhibits that are included in Form 10-K at the time the form is filed.   
The rule becomes effective when it is published in the Federal Register.  The SEC is soliciting feedback on whether it should provide further guidance on the preparation and content of the summary, limit its length or dictate its location (among other topics).  The comment period will remain open for 30 days following the date the rule is published in the Federal Register.     

For questions related to matters discussed above, please contact Jeff Lenz or Paula Hamric.
[1] Further information on the FAST Act can be found here in a BDO Flash Report.