Letter to SEC in response to Request for Comment on Business and Financial Disclosure Required by Regulation S-K

SUMMARY

The Financial Reporting Committee (David S. Huntington, Chair) sent a letter in response to the Securities and Exchange Commission’s request for comments on possible revisions to the business and financial disclosure requirements in Regulation S-K. The Committee discourages adoption of tiered disclosure requirements designed for investors of different levels of sophistication and industry knowledge—rather, the requirements should strike a pragmatic balance that meets the needs of a variety of constituents. The Committee urges the Commission to encourage companies to write clear, plain English disclosure documents that can be navigated easily and digested by individual and institutional investors alike, and to require registrants to provide an overview describing what happened at the company over the past year and the company’s expectations and concerns for the coming year. It also urges the Commission to encourage the use of cross-referencing and hyperlinks, especially within and across Commission filings, to reduce duplicative disclosure and to help readers navigate disclosures; and to improve the delivery of information to investors by fixing the formatting of documents in the EDGAR system. In addition, it urges the Commission to consider a “company profile” disclosure model, whereby issuers would be required to maintain (and periodically update) a standing collection of important documents—e.g., governance documents, material contracts, executive compensation-related documents, registration statements and ownership-related documents—on a web page that could be part of the EDGAR system or a company website.