United States: SEC Adopts Final Rules To Update And Simplify Disclosure Requirements

The U.S. Securities and Exchange Commission (SEC) has adopted final rules1 to eliminate redundant, duplicative, overlapping, outdated, or superseded disclosure requirements. These rules, adopted more than two years after the SEC proposed such changes,2 amend certain provisions of Regulation S-X and Regulation S-K, certain rules promulgated under the Securities Act of 1933 and the Securities Exchange Act of 1934, and certain related forms. The amendments are a product of the SEC's efforts to ease understanding for investors and reduce unnecessary compliance burdens for issuers.

Redundant or Duplicative Requirements

The final rules eliminate certain disclosure requirements that require substantially similar disclosures as U.S. generally accepted accounting principles ("U.S. GAAP"), International Financial Reporting Standards ("IFRS"), or other SEC disclosure requirements. Section II.B.2 of the adopting release includes a table listing the eliminated provisions of Regulation S-X relating to, among other items, financial statement consolidation, debt obligations, income tax disclosures, securities subject to convertible instruments, related party identifications, contingencies, and earnings per share.

Overlapping Requirements

The final rules also eliminate and/or integrate certain disclosure requirements that overlap with disclosures under U.S. GAAP and other SEC disclosure requirements. For example, the amendments eliminate certain requirements under Regulation S-X relating to derivative instruments and certain other requirements described in the table in Section III.B.1.g)(1) of the adopting release.

In addition, the final rules eliminate multiple requirements under Regulation S-K due to overlap, including those described in the table included in Section III.B.2 of the adopting release, as well as:

  • the requirement to disclose in the business section of a prospectus or periodic report the amount spent on research and development activities, information by geographic area, the risks associated with foreign operations, and segment financial information;
  • the requirement to discuss seasonality in the Management's Discussion and Analysis;
  • the requirement to provide Regulation S-K Item 201(d) equity compensation plan disclosure in response to Item 10 (Compensation Plans) of Schedule 14A;3
  • in connection with offerings of debt securities and/or preferred stock, the requirement to disclose the ratio of earnings to fixed charges and ratio of combined fixed charges and preference dividends to earnings, as applicable; and
  • the requirement to include pro forma financial information in interim filings for business combinations under Rule 8-03(b)(4) and Rule 10-01(b)(4) of Regulation S-X.

For several disclosure requirements that overlapped with, but required information in addition to, other SEC disclosure requirements, the final rules integrate the overlapping disclosure requirements. For example, disclosures about restrictions on the payment of dividends and related items have been revised and/or consolidated, as described in the table in Section III.C.2 of the adopting release.

Outdated Requirements

The final rules also amend a number of disclosure requirements that have become outdated as a result of the passage of time or changes in regulatory, business, or technological environments. For example, recognizing that daily market prices of most publicly traded common equity securities are readily available free of charge on numerous websites, the final rules eliminate the requirement under Item 201(a)(1) of Regulation S-K to provide detailed disclosure of sale or bid prices for most issuers whose common equity is traded in an established public trading market. Other amendments, including the elimination of the requirement to refer to the SEC's Public Reference Room and the addition of the requirement that all issuers disclose their website address, are described in the table in Section IV.C.2 of the adopting release.

Superseded Requirements

Finally, the final rules amend other provisions that have been superseded by newer accounting, auditing, and disclosure requirements, including by eliminating, among other things, all references to "extraordinary" items in the SEC's rules and forms and making related amendments to Item 302(a)(1) of Regulation S-K. The tables in Sections V.B.2, V.B.6, V.C.1, and V.C.2 of the adopting release describe certain other eliminations and amendments, including with respect to financial statement requirements and auditing standards.

FASB Referrals

The SEC refrained from adopting some of the amendments it proposed two years ago and has, instead, referred certain requirements in Regulation S-X and Regulation S-K to the Financial Accounting Standards Board (FASB) for potential incorporation into U.S. GAAP. The SEC has requested that the FASB complete its determination process within 18 months after the adopting release is published in the Federal Register.

Helpful References

The adopting release includes a detailed table, ahead of the table of contents, for ease of reference to the several rules and disclosure requirements impacted by the amendments. In addition, the SEC has published a " Demonstration Version " of the final rules, which contains a markup of the amended rules and highlights those items referred to FASB, in each case, cross-referencing to the applicable section of the adopting release.4

Next Steps

The final rules will become effective 30 days after they are published in the Federal Register. In the interim, issuers should review the final rules, together with the "Demonstration Version" referenced above, to familiarize themselves with both the content and placement of disclosures as amended.

Issuers should take special note that the relocation of certain disclosures from outside to inside the financial statements will subject such disclosures to annual audit and/or interim review, internal control over financial reporting, and XBRL tagging requirements, as applicable. In addition, the safe harbor under the Private Securities Litigation Reform Act of 1995 for forward-looking statements will not be available for disclosures moved to inside the financial statements.


1 See "Disclosure Update and Simplification," SEC Release No. 33-10532 (Aug. 17, 2018), available at https://www.sec.gov/rules/final/2018/33-10532.pdf (hereinafter referred to as the "adopting release").

2 See "Disclosure Update and Simplification," SEC Release No. 33-10110 (Jul. 13, 2016), available at https://www.sec.gov/rules/proposed/2016/33-10110.pdf.

3 Note, however, that the SEC retained the Item 201(d) disclosure requirement in Part III of Form 10-K.

4 See Demonstration Version to the adopting release, available at https://www.sec.gov/rules/ proposed/2018/33-10532-demonstration.pdf .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions