On Sept. 23, 2016, the SEC extended the comment period on its proposed rules on Disclosure Update and Simplification (Release No. 33-10110; 34-78310) to allow additional time for “interested persons to analyze the issues and prepare their comments.” The comment period will now end on Nov. 2, 2016.
In July 2016, the SEC proposed amendments to Reg. S-X, Reg. S-K, Reg. M-A, Reg. AB, Reg. C and various Securities Act forms as part of the SEC’s ongoing Disclosure Effectiveness Initiative mandated by Congress under the JOBS Act of 2012. The proposed amendments are intended to modify or eliminate existing disclosure requirements that have become redundant, duplicative, overlapping, outdated or superseded, and include amendments such as removing the requirement in Item 201(a)(1) of Reg. S-K to provide the high and low sale prices for each quarter for the last 2 fiscal years and eliminating the disclosure of existing equity compensation plan information under Item 201(d) of Reg. S-K.
The SEC has also solicited comments on disclosure requirements that overlap with, but require information incremental to, the requirements of U.S. GAAP.
While most comments received to date addressed discrete issues or requested an extension of the comment period, the Council of Institutional Investors, or CII, submitted preliminary comments and expressed concern at the detailed, technical nature of the comments and the ability of investors to ascertain during the comment period whether the proposed changes will significantly impact the mix of information available to investors. The CII also questioned the use of resources by the SEC to finalize these rules when other projects remain incomplete (such as finalizing rules to implement remaining Dodd-Frank proposals).