SEC changes disclosure rules for banks

By Ken Tysiac

Statistical disclosures that bank and savings and loan registrants provide to investors will change after the SEC announced rule changes Friday.

The SEC updated its rules in light of changes to the banking sector that have taken place over the past 30 years. The rules eliminate certain disclosure items that duplicate requirements of other SEC rules and requirements of U.S. GAAP or IFRS.

The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart of Regulation S-K.

Under the new rules, disclosure is required about:

  • Distribution of assets, liabilities, and stockholders' equity, the related interest income and expense, and interest rates and interest differential.
  • Weighted average yield of investments in debt securities by maturity.
  • Maturity analysis of the loan portfolio, including the amounts that have predetermined interest rates and floating or adjustable interest rates.
  • Certain credit ratios and the factors that explain material changes in the ratios, or the related components during the periods presented.
  • The allowance for credit losses by loan category.
  • Bank deposits, including average monthly amounts and rate paid and amounts that are uninsured.

"Guide 3 has not been substantively updated for more than 30 years," SEC Chairman Jay Clayton said in a news release. "The changes we are adopting today are designed to elicit better disclosures for investors and add efficiencies to the compliance efforts of registrants."

The rules will take effect 30 days after publication in the Federal Register and will apply to fiscal years ending on or after Dec. 15, 2021. Voluntary compliance with the new rules will be accepted before the mandatory compliance date.

Guide 3 will be rescinded effective Jan. 1, 2023.

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA's editorial director.

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