SEC Flash Report - October 2015

October 2015

SEC Publishes Request for Comment on Regulation S-X

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On September 25th, the Securities and Exchange Commission published a request for comment on the effectiveness of certain financial disclosure requirements of Regulation S-X.  The request is part of the Disclosure Effectiveness Initiative, a broad-based staff review of the SEC’s disclosure rules designed to improve the disclosure regime for both companies and investors. 
The request for comment focuses on the disclosure requirements for entities other than a registrant, including those of acquired businesses (under Rule 3-05), subsidiaries not consolidated and 50 percent or less owned persons (under Rules 3-09 and 4-08(g)), guarantors and issuers of guaranteed securities (under Rule 3-10), and affiliates whose securities collateralize registered securities (under Rule 3-16).  The request contains questions directed to investors and registrants about:
  • How the required financial information is utilized
  • What changes could be made to improve its usefulness
  • What challenges registrants face in preparing such information
  • Whether the bright-line tests required by some of the rules should be revised
  • Whether judgment should enter into the determination to provide some of the financial information, etc.
The request for comment can be found here on the SEC’s website.  Comments should be provided within 60 days following publication of the request for comment in the Federal Register.

For questions related to matters discussed above, please contact Jeff Lenz or Paula Hamric.