At Northwestern’s annual Securities Regulation Institute in San Diego yesterday, SEC Commissioner Mark Uyeda delivered this speech about how securities law reform in the Corp Fin area might unfold. His main themes consisted of:
- Not being merit regulators
- Strengthening the disclosure framework
- Promoting scaled disclosure
- Reestablishing a focus on financial materiality
Commissioner Uyeda provided these examples of things that could be tackled as part of the SEC’s Regulation S-K reform project:
- For insider trading arrangements and policies, delete the requirement to disclosure them under Item 408(b).
- For related persons, raise the de minimis threshold of $120,000 or replace the numerical threshold with a more principles-based approach tied to materiality under Item 404. Additionally, the narrative description of policies could be replaced with a requirement to file them or make them readily available on corporate websites.
- For cybersecurity disclosures, streamline and simplify the narrative disclosures under Item 106.
- For unregistered transactions, delete or modify the 3-year look-back for unregistered sales of securities under Item 701 (and the corresponding Form 10-K item).
- For disclosures of the number of security holders and performance graphs, delete the five-year graph of the issuer’s total cumulative return compared to a broad index and a line-of-business or peer group index under Item 201.
- For mine safety disclosure in Form 10-Q, move the disclosure elsewhere – such as Form 8-K or Form SD – rather than have such disclosure in a recurring quarterly filing.
Authored by
Broc Romanek