The Securities and Exchange Commission recently adopted changes to its disclosure requirements for US public companies and foreign private issuers. The changes are incremental, but would affect most companies’ annual reports and other SEC filings, particularly with respect to information contained in exhibits. Principal changes include:

  • Management’s Discussion and Analysis. The discussion of results of operations in the MD&A is only required for the two most recent years, not the three most recent years, if discussion of the third year has already been disclosed in a prior SEC filing. Reference to “year-to-year comparison” has also been removed, providing companies with greater flexibility in how they present the discussion in their MD&A.
  • Description of Registered Securities as an Exhibit. Companies are required to provide a brief description of their registered securities as an exhibit to their annual report on Form 10-K or 20-F.
  • Omission of Schedules to all Exhibits. Companies are permitted to omit schedules (and other attachments) from all exhibits, not just acquisition agreements, unless they contain information material to an investment or voting decision and this information is not otherwise disclosed in the exhibit or the disclosure document.
  • Redaction of Confidential Information in Material Contracts and Plans of Acquisition Filed as Exhibits. Companies are permitted to redact provisions or terms of material contracts and business combination agreements filed as exhibits – without needing automatically to file a confidentiality request - if such provisions are both (i) not material and (ii) would likely cause competitive harm to the company if disclosed. The SEC may in the future request an unredacted version or the company’s competitive harm analysis
  • Omission of Personal Information from Exhibits. Companies are specifically permitted to redact information from exhibits if disclosure of such information would constitute a clearly unwarranted invasion of personal privacy (such as bank account numbers, social security numbers and home addresses).
  • Properties. A description of the company’s physical properties is required only to the extent material.

The final rules become effective on May 2, 2019, except for the amendments to the rules governing redaction of confidential information in material contracts, which are effective today.

We have prepared a detailed chart, which summarizes principal elements of the rule changes and compares the new disclosure requirements to the prior requirements.