In a speech earlier today, Securities and Exchange Commission Chair Clayton discussed the Commission’s guiding principles. In his comments relating to disclosure requirements, Chair Clayton noted that “the roughly 50% decline in the total number of U.S.-listed public companies over the last two decades forces us to question whether our analysis should be cumulative as well as incremental.” I believe it should be. As a data point, over this period, studies show the median word-count for SEC filings has more than doubled, yet readability of those documents is at an all-time low.” Clayton notes that the Commission needs to do more to make the public markets more attractive, without affecting adversely the private markets. Consistent with the Commission’s statements a few days ago regarding the Commission’s willingness to consider requests from issuers regarding omitting certain information, Clayton noted that, “Under Rule 3-13 of Regulation S-X, issuers can request modifications to their financial reporting requirements in these situations. I want to encourage companies to consider whether such modifications may be helpful in connection with their capital raising activities and assure you that SEC staff is placing a high priority on responding with timely guidance.”

Clayton also noted that the Staff of the Commission continues to work on recommendations following the report on modernizing and simplifying Regulation S-K requirements. The full speech, which also addressed enforcement, the regulation of derivatives, and investment management, is available here: