Reed Smith Client Alerts

The Securities and Exchange Commission (SEC) issued a long-awaited rule proposal in mid-October implementing many of the SEC staff’s recommendations in its November 2016 Report on Modernization and Simplification of Regulation S-K under the Fixing America’s Surface Transportation Act’s (FAST Act) directive to modernize and simplify the requirements in Regulation S-K (FAST Act Report). The proposed rules are intended to reduce, streamline or eliminate disclosure in a number of areas, but the changes also propose additional disclosure requirements and the use of technology to improve the readability and navigability of disclosure documents. The proposed changes are designed to reduce compliance costs and burdens on public companies while continuing to provide all material information to investors. The rule proposals were informed by the staff’s broader study of disclosure effectiveness, however, they do not go significantly beyond the staff’s recommendations in the FAST Act Report. While the proposed changes, if adopted, will have the welcome effect of streamlining some disclosure requirements and improving the readability of disclosure documents, they do not mark a significant departure from the current disclosure regime.

Authors: Danielle Carbone

Many of the proposals are clarifying or technical in nature, but a number of the proposals, if adopted, will necessitate that public reporting companies “take a fresh look” at some of their disclosures and the way in which they present information. The proposals that are likely to have the most impact on disclosure documents are described below and the tables that follow summarize the proposed amendments to various items of Regulation S-K and related rules and forms.