The SEC proposed amendments to Regulation S-K that would revise the description of business, legal proceedings and risk factor disclosures registrants are required to make under the Securities Act.
According to the SEC, the aims of the proposed amendments are to (i) improve disclosures for investors, (ii) simplify compliance for registrants, (iii) decrease repetition in disclosure documents, and (iv) not require disclosure of information that is not material.
Specifically, under Regulation S-K, the proposal would:
- allow registrants more "flexibility" to tailor disclosures specific to their circumstances;
- require registrants to provide only material updates to disclosures pertaining to the general development of the business on filings other than initial registration statements;
- add human capital resources and any human capital measures or objectives related to business management as a disclosure topic;
- require disclosure of material government regulations;
- increase the threshold from $100,000 to $300,000 of a disclosure of environmental proceedings in which the government is a party;
- provide for a summary of the risk factor disclosure should the explanation of the factors making an investment "risky" exceed 15 pages; and
- revise the principles-based approach to require that "material" risk factors be disclosed rather than the "most significant" risks under the disclosure standard.
Comments must be submitted within 60 days of publication of the proposal in the Federal Register.
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