The SEC has posted a request for comment on some of the Reg S-K disclosure requirements that were not specifically covered in the Reg S-K Concept Release, issued earlier this year (see this PubCo post), which assessed the Reg S-K business and financial disclosure requirements. This release requests comment on the Reg S-K items related to management (Items 401), executive compensation (Item 402), certain security holders (Item 403), related-person transactions, (Item 404), short-swing trading filing delinquencies (Item 405), adoption of a code of ethics (Item 406) and corporate governance matters (Item 407). The Reg S-K Concept Release was 341 pages. This one is a lot shorter. In fact, it’s only eight pages. If you regularly read SEC releases, you know that’s barely enough space for the file number and the address of the public reference room.
And that’s because, unlike the concept release, this one has no specific suggestions or questions, no thoughts or ideas. It’s more of a “public, have at it” release. The Reg S-K Concept Release was clearly a mammoth undertaking, so it’s hard to know why these topics were given short shrift. It may be that, in contrast to the Concept Release — which covered territory that is, according to the release, “often the foundation of the disclosures investors look to when making investment decisions” and has been largely unexamined for 30 years — some of the items subject to comment here have been reviewed and revised in the last ten years. The release notes that public comments may relate to existing requirements as well as potential disclosure issues that commenters believe the rules should address, such as industry-specific disclosure requirements, information about sustainability and governance matters, as well as additional areas appropriate for scaled disclosure, modernization and simplification. In addition to the substantive requirements, comments are requested on improvements to readability, navigability and comparability, as well as the use of technology and structured data. Comments, which will be taken into account as part of Corp Fin’s disclosure effectiveness initiative, the comprehensive study mandated by the FAST Act and any related future rulemaking, will be due 60 days after publication in the Federal Register.