Magazine article Strategic Finance

SEC Chair Pushes for Disclosure Relief

Magazine article Strategic Finance

SEC Chair Pushes for Disclosure Relief

Article excerpt

The Securities & Exchange Commission (SEC) is readying a study authorized by Congress that examines potential financial reporting requirements that can be eliminated. SEC Chair Mary Jo White has been talking up the notion of relieving corporations of having to disclose information no longer deemed "material" so that investors have an easier job of understanding 10-Ks and other financial reports. Section 108 of the 2012 JOBS Act requires the SEC to comprehensively analyze the rules that form the underpinnings of the SEC's disclosure regime. The JOBS Act included provisions aimed at making it easier for emerging companies to go public, in part by reducing their disclosure requirements such as those having to do with reports on internal controls. The SEC Division of Corporation Finance is finalizing this report, and White says it's expected to be made public very soon. The odds are that those recommendations will focus on going beyond the JOBS Act provisions for "emerging" companies, and reporting relief for big corporations may be in the offing as well. Of course, Congress would have to turn any SEC recommendations into legislation, which would have to pass both houses.

White has been talking up the need for corporate reporting simplification and slimming. In a speech, "The Path Forward on Disclosure," in mid-October to the National Association of Corporate Directors (NACD), White said, "The study is only the first step in any potential review effort. Such a review will need to be guided by answers to a host of questions that will move us forward on the path to more optimal disclosure. …

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