Archives: Disclosure

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SEC Amends Rules to Require Inline XBRL Reporting

Just before Independence Day, the SEC adopted amendments to its eXtensible Business Reporting Language (XBRL) reporting requirements, which will become effective 30 days after their publication in the Federal Register. (Although the amendments apply to both operating companies and funds, I’ll address only the impact on companies.) The amendments will require, on a phased-in basis, … Continue Reading

SEC Amends NYSE’s After Market Announcement Rule

The SEC recently approved an amendment to NYSE’s Listed Company Manual prohibiting companies from issuing material news after NYSE closes for trading – 4:00 p.m. Eastern time on normal trading days – until the earlier of (a) publication of the company’s official closing price by NYSE and (b) five minutes after NYSE’s official closing time. … Continue Reading

SEC Guidance Regarding the Tax Cuts and Jobs Act

You may have heard that the Republican tax overhaul (originally known as the Tax Cuts and Jobs Act of 2017) was signed into law on December 22, 2017. That same day, the SEC staff provided helpful disclosure guidance in the form of Staff Accounting Bulletin No. 118 and C&DI 110.02. Together, this timely guidance clarifies … Continue Reading

The SEC’s Disclosure Modernization Proposals

Recent proposed rules to modernize and simplify SEC disclosure requirements have gotten a lot of attention. You may recall that the Fixing America’s Surface Transportation (FAST) Act of 2015  directed the SEC to issue a report recommending amendments to Regulation S-K to accomplish those goals. The SEC issued its report in November 2016. The proposals … Continue Reading

The New Auditor Reporting Standards

Late last month, the SEC approved the new auditing standards adopted by the PCAOB back in June, which substantially modify the content of the auditor’s report. They also raise various concerns that public companies and the SEC will need to closely monitor going forward. Critical audit matters disclosure. By far the biggest and most controversial … Continue Reading

Sustainability Reporting After the Paris Climate Accord

It’s fair to say that President Trump’s June 1 announcement that the U.S. will withdraw from the Paris climate accord has been widely reported. It’s also fair to say that the announcement triggered a host of passionate reactions, positive and negative, around the world. Within corporate America, a number of high-profile corporations (for example, Apple, … Continue Reading

A Compliance Calendar Tip: Update for T+2

A few weeks ago, the SEC finalized rules to shorten the standard settlement period for securities transactions from three business days (T+3) to two business days (T+2). Amended Exchange Act Rule 15c6-1(a) will prohibit a broker-dealer from entering into a contract for the purchase or sale of a security (subject to certain exceptions) that provides … Continue Reading

Conflict Minerals–What Just Happened and What Didn't

The conflict minerals saga continues. Background In April 2014, the Court of Appeals for the D.C. Circuit in National Association of Manufacturers v. SEC held that the conflict minerals rule’s requirement that companies state that their products have not been found to be “DRC conflict free” violated the First Amendment. Subsequently, the SEC staff released … Continue Reading

The Downside of Sustainability Reporting

Not long ago, I wrote about the growth of sustainability reporting among public companies. (See this Doug’s Note.) It is now widely believed that effective sustainability reporting, also called “corporate social responsibility” reporting, facilitates a perception among investors, employees, customers, suppliers and other stakeholders that a company is committed to operational, compliance and governance values … Continue Reading

Don't Forget the Say-on-Frequency Form 8-K

The proxy rules require that public companies submit a nonbinding proposal to their shareholders every six years regarding how often they should hold say-on-pay votes, known as “say-on-frequency.” Most companies held their first say-on-frequency vote in 2011 and will be including another vote in their 2017 proxy statements. (“Smaller reporting companies” were not required to … Continue Reading

Sustainability Reporting Continues to Mature

Several years ago, voluntary sustainability reporting in proxy statements, annual reports to shareholders, websites and special sustainability reports to various stakeholders began to take hold, even as the SEC continued to resist calls for mandatory sustainability reporting and even in the general absence of guidance regarding what to disclose and how. (See this Doug’s Note.) … Continue Reading

NYSE's Annual Guidance Memo

Earlier this month, the staff of NYSE Regulation issued its annual guidance memorandum, which highlights recent NYSE developments and other points of emphasis for the coming year. This year’s guidance includes nearly twenty items that the staff deemed noteworthy. Borrowing the guidance memorandum’s main headings, I have summarized below those items that seem particularly worthy … Continue Reading

The Demise of Pay Ratio Disclosures?

Dating back to their adoption in August 2015, as mandated by Dodd-Frank’s Section 953(b), the pay ratio rules have led a strange existence. For a while, companies generally ignored them because their effective date was so far in the future—for calendar-year companies, disclosures are first required in spring 2018 proxy statements regarding 2017 compensation. Furthermore, … Continue Reading

More Conflict Minerals Drama

Well, it wouldn’t be February without a “helpful” reminder that Form SD filings are due on May 31st and a new development that casts confusion over the process. This year, the confusion comes in the form of last week’s statement from Acting SEC Chairman Michael S. Piwowar declaring that he has “directed the staff to … Continue Reading

Election Result Risk Factors

January is a good time for calendar-year-end companies to re-evaluate, and update as necessary, their Form 10-K risk factors. This year in particular, the November election results introduce a wide range of new considerations for many companies and industries. It is important, therefore, for each public company to carefully consider how it may be impacted … Continue Reading

Frequent Topics for SEC Comment

Every year about this time various organizations compile surveys of, and provide analysis regarding, SEC comment letters issued during the recent year. This can be a useful predictor of hot topics for the coming year and provides helpful guidance for company disclosures going forward. Perhaps even more helpful is the SEC staff’s own list of … Continue Reading

Tips for Seeking Shareholder Approval of Equity Benefit Plans

Most public companies regularly submit equity benefit plans to their shareholders for approval. As a general rule, both NYSE and Nasdaq require that every new benefit plan, and any material amendment to an existing plan, be approved by the shareholders if it offers equity to the company’s officers, directors, employees or consultants (subject to certain … Continue Reading

Loss Contingency Disclosures–A Warning from the SEC

Companies frequently struggle with how to account for loss contingencies and when to make the related disclosures. A recent complaint by the SEC against RPM International, Inc. and its General Counsel highlights the importance of getting it right…and the potential consequences of getting it wrong. It also provides a useful summary of the SEC’s analysis … Continue Reading

Accounting Standard Transition Disclosures under Scrutiny by the SEC

Several significant new accounting standards have refocused the SEC staff’s attention on public company “transition disclosures.” In remarks earlier this year, Wesley R. Bricker, then Deputy Chief Accountant of the SEC, emphasized the staff’s position that companies should disclose the impact that a recently issued accounting standard will have on its financial statements when that standard is … Continue Reading

Quiet Period Best Practices

The insider trading policies of almost all public companies contain closely monitored “black out” periods that prohibit trades by designated classes of employees during certain periods in the company’s SEC reporting cycle. Less prevalent, and less rigidly enforced, are “quiet period” policies, which generally forbid management from discussing financial results, business outlook or other material … Continue Reading
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