Yesterday, the SEC proposed amendments to eliminate redundant, overlapping, outdated, or superseded provisions, in light of subsequent changes to SEC disclosure requirements, U.S. GAAP, IFRS and technology. The SEC also solicited comment on certain disclosure requirements that overlap with U.S. GAAP to determine whether to retain, modify, eliminate or refer them to the FASB for potential incorporation into U.S. GAAP. The proposing release is part of the SEC’s disclosure effectiveness review (criticized of late by Senator Warren), which is a broad-based staff review of the requirements, and the presentation and delivery of disclosures that companies make to investors. The proposals are also part the implementation of the Fixing America’s Surface Transportation (FAST) Act, which, among other things, requires the SEC to eliminate provisions of Regulation S-K that are duplicative, overlapping, outdated, or unnecessary. The proposals are subject to public comment and may or may not be enacted in the near-term, but many of them appear to be “low hanging fruit” that are common-sense, non-controversial changes that would help public companies to at least start to chip away at their bulging disclosure documents. While not radical changes, it’s a step in the right direction to see some of the simplification concepts the SEC has discussed for months start to move to the proposal stage.
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