SEC Flash Report - March 2017

March 2017

During March, the Securities and Exchange Commission completed rulemaking and published a request for comment.  These activities were primarily related to the SEC’s broader disclosure effectiveness initiative and include:   
 
  • A request for comment on possible changes to Industry Guide 3 – Statistical Disclosure by Bank Holding Companies. Industry Guide 3 was first published over 40 years ago.  The request seeks input on the overall scope and applicability of Guide 3 disclosures and solicits feedback on whether the disclosures continue to provide the information investors need to make informed investing and voting decisions.  It also questions whether there are additional disclosures that would be relevant to investors and whether to eliminate overlapping or duplicative disclosures. The request for comment can be found here on the SEC’s website.  Comments are due May 8, 2017.
  • A proposal to require Inline XBRL.  Issuers have historically been required to provide XBRL data in an exhibit to their filings.  Consequently, issuers copy their financial statement information into a separate document and tag it in XBRL.  The SEC’s proposal would require issuers to embed XBRL tags directly in their financial statements using a format known as Inline XBRL in lieu of providing tagged data in a separate exhibit.  The proposal follows an SEC order issued in June last year which permitted, but did not require, issuers to use Inline XBRL.  The intent of the proposal is to reduce the preparation costs and increase the quality and usefulness of the data, thereby increasing its use by investors and other market participants.  The Inline XBRL requirements would become effective for large accelerated filers in the second year following the effective date of the rule, followed by accelerated filers in the third year, and all other filers in the fourth year. 
The proposing release is available here on the SEC’s website.  Comments are due May 16, 2017.
  • An IFRS taxonomy.  The IFRS taxonomy will allow foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB to submit their financial statements in XBRL.  Issuers will be required to submit their financial statements in XBRL for fiscal periods ending on or after December 15, 2017, though they can voluntarily begin using the taxonomy immediately. 
The press release announcing the availability of the taxonomy is available here on the SEC’s website.
  • Final rules requiring hyperlinks to exhibits. The rules, which are applicable to all forms for which exhibits are required under Item 601 of Regulation S-K,[1] will require registrants to include a hyperlink to each exhibit (excluding XBRL exhibits) listed in the exhibit index of their periodic and transactional filings. To facilitate the use of hyperlinks, exhibits must be filed in HTML format.  The intent is to facilitate easier access to these exhibits for investors and other stakeholders.  The rules become effective for filings submitted on or after September 1, 2017.  Smaller reporting companies and filers other than large accelerated or accelerated filers who use ASCII format (instead of HTML format) need not comply until September 1, 2018. 

The adopting release is available here on the SEC’s website.   
 

For questions related to matters discussed above, please contact:
 
Jeffrey Lenz
National Director, SEC Practice
 
Paula Hamric
National Assurance Partner
 
 
[1] The rules are also applicable to registrants that file Forms F-10 or 20-F.