SEC asks for comments on disclosure simplification

By Ken Tysiac

As part of an effort to improve disclosures for investors and companies, the SEC issued a request for comment Thursday on certain disclosure requirements related to management, certain security holders, and corporate governance matters.

The request is part of the commission’s Disclosure Effectiveness Initiative, an SEC staff review of disclosure requirements and the presentation and delivery of disclosures. The staff is seeking ways to modernize and simplify disclosures.

The SEC is asking for input on Subpart 400 of Regulation S-K, including requirements for disclosures about:

  • A registrant’s directors, executive officers, promoters, and control persons.
  • All plan and nonplan compensation paid to executive officers and directors.
  • Securities owned by certain beneficial owners and management.
  • Certain transactions with related persons, promoters, and certain control persons.
  • Certain persons who failed to file timely reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year or previous fiscal years.
  • Whether the registrant has adopted a code of ethics that applies to certain executive officers—and if not, an explanation why.
  • Director independence, board meetings, board committees, and processes for shareholder communication.

Comments can be made within 60 days after the invitation to comment is published in the Federal Register, and can be submitted through the SEC’s website.

Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

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