The American securities regulator, the US Securities Exchange Commission (SEC), voted last week on a proposal to ‘modernise’ disclosures under Regulation S-K under the Securities Act 1933 regarding the reporting requirements for public companies.
According to the SEC’s official release, this move will help improve the readability of the disclosure documents and will bring up-to-date the descriptions of businesses, legal proceedings and risk factors’ disclosures.
“The world economy and our markets have changed dramatically in the more-than-30-years since the adoption of our rules for business disclosures by public companies. Today’s proposal reflects these significant changes, as well as the reality that there will be changes in the future,” said SEC Chairman, Jay Clayton.
This announcement also came from the 116-page proposal, which focussed on items 101, defined as the general development of a business, 103 which deals with legal proceedings, and 105 on risk factors.
“I applaud the staff for their efforts to modernize and improve our disclosure framework, including recognizing that intangible assets, and in particular human capital, often are a significantly more important driver of value in today’s global economy. The proposals reflect a thoughtful mix of prescriptive and principles-based requirements that should result in improved disclosures and the elimination of unnecessary costs and burdens,” Clayton said.