Letter to the SEC on its initiative to improve the quality and usefulness of public company disclosure

SUMMARY

The Committee on Financial Reporting wrote a letter to the SEC regarding the Commission’s initiative to improve the quality and usefulness of public company disclosure, proposing a separate “rule to cut through the rules.” The Committee expressed concern that the ever increasing amounts of disclosure can make it difficult for investors to ferret out the most relevant information. Therefore, the Committee proposes a rule, separate and apart from existing disclosure requirements, that would read: Provide an overview describing what happened at the company over the past year and your expectations and concerns about the year to come. The Committee said that experience suggests that some of the most effective communication of business information has been achieved where management judgment has been permitted to play a significant role.