The SEC has placed several projects on its short-term agenda to streamline and modernize disclosure requirements. These include proposing amendments to Regulation S-X on the disclosure of financial information relating to acquired businesses and updates to Industry Guide 3 on bank holding company disclosures.
Another project would modernize certain business and nonfinancial disclosure requirements found in Regulation S-K. This project would build on a concept release issued in 2016 covering a wide range of disclosure requirements.
Bill Hinman, Director of the Division of Corporation Finance, also has indicated that he hopes the SEC will adopt the July 2018 proposal that would help streamline and simplify financial disclosures relating to guaranteed and collateralized debt securities.
Scrutiny of Brexit and cybersecurity disclosures
Clayton has indicated that disclosures relating to Brexit and cybersecurity will receive attention from the staff. Clayton has expressed concern that the market does not fully understand the implications of the United Kingdom’s planned exit from the European Union and that disclosures to investors may be insufficient.
In addition, as cybersecurity has taken on greater prominence, Clayton and SEC staff have continued to communicate concerns that public companies are not adequately disclosing their cybersecurity risks to investors.
In 2019, the SEC plans to move forward on a rule re-proposal required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). This rule would require resource extraction companies to disclose payments to governments. While the SEC adopted a final rule to implement this provision of the Dodd-Frank Act in 2016, Congress overturned it in 2017.
Expected actions in 2019:
- Proposed rules to streamline and modernize certain disclosure requirements
- Scrutiny of company disclosures on Brexit and cybersecurity issues
- Dodd-Frank rulemaking on disclosures of payments to governments by resource extraction companies.