SEC amends additional Regulation S-K disclosures

MD&A

The Final Rule expands the principles-based nature of the disclosure framework in Management’s Discussion and Analysis (MD&A) and codifies existing Commission guidance on this topic. The amendments further streamline disclosures and reduce redundancy between MD&A and existing U.S. GAAP disclosure requirements. See a summary of the amendments in the table below.

Other amendments

Although the Final Rule eliminates Item 301, a registrant is encouraged to continue to consider whether tabular disclosure may be appropriate in an introductory or overview section, including disclosures that demonstrate material trends.

Under the amendments to Item 302(a), a registrant is no longer required to provide two years of selected quarterly financial data. Rather, a registrant should use the principles-based approach to reflect any material retrospective changes to previously presented quarterly financial information. Item 302(a), as amended, applies beginning with the first filing on Form 10-K after a registrant’s initial registration statement.

The Final Rule adopts parallel changes to certain financial disclosures provided by foreign private issuers, as well as conforming amendments to Forms 20-F and 40-F.

Compliance dates

The Final Rule is effective 30 days after publication in the Federal Register.

Registrants are required to apply the amended rules in their first fiscal year ending on or after 210 days after the Final Rule is published in the Federal Register (the mandatory compliance date). The amended rules apply to a registration statement and prospectus that, on its initial filing date, include financial statements for a period ending on or after the mandatory compliance date.