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SEC seeks comment on management, security holder, and corporate governance disclosures in Reg. S-K

rules and regulations marked on rubber stamp

The Securities and Exchange Commission has published a Request for Comment relating to certain disclosures required under Regulation S-K relating to management, certain security holders, and certain director and corporate governance matters.

The Request for Comment issued today, focused on Subpart 400 of Regulation S-K, is part of the Commission's broader Disclosure Effectiveness initiative, including a separate Concept Release and Proposed Rule issued for public comment a little over a month ago. The Disclosure Effectiveness initiative, a broad project the SEC launched to primarily improve - and secondarily, simplify - the disclosure framework, has also been designed to be responsive to the requirements of Section 108 of the Jumpstart Our Business Startups Act (“JOBS Act”), under which the SEC has published one study of Reg S-K, and Section 72003(a) of the Fixing America's Surface Transportation Act ("FAST Act"), under which another SEC study of Reg S-K will be produced.

With respect to today's Release on Subpart 400 of Reg S-K, the SEC generally seeks comment on:

  • how best to modernize and simplify these disclosure items,
  • whether additional disclosures in these areas are necessary or appropriate to facilitate investor protection, to maintain fair, orderly, and efficient markets, and/or to facilitate capital formation, and
  • how information can be presented to improve its readability, navigability and comparability and how technology and structured data can facilitate data aggregation and analysis.

The matters are included in Subpart 400 of Reg. S-K, according to the SEC's Release:

  • Item 401 generally requires certain disclosures about a registrant’s directors, executive officers, promoters and control persons.12
  • Item 402 generally requires disclosure of all plan and non-plan compensation awarded to, earned by, or paid to a registrant’s named executive officers and directors.
  • Item 403 generally requires a description of the security ownership of certain beneficial owners and management.
  • Item 404 generally requires a description of certain transactions with related persons, promoters and certain control persons.
  • Item 405 generally requires a registrant to identify certain persons who failed to file on a timely basis, as disclosed in certain forms, reports required by Section 16(a) of the Securities Exchange Act16 during the most recent fiscal year or prior fiscal years.
  • Item 406 generally requires disclosures about whether the registrant has adopted a code of ethics that applies to certain of the registrant’s executive officers,or persons performing similar functions, and, if it has not adopted such a code of ethics, an explanation why it has not done so.
  • Item 407 generally requires certain corporate governance disclosure about director independence, board meetings, various board committees (e.g., nominating, audit and compensation committees) and any process for shareholder communications.

There is a 60-day comment period on the Release issued today (ending 60 days after the Release is published in the Federal Register).

The full title of the Release issued today is, Request for Comment on Subpart 400 of Regulation S-K Disclosure Requirements Relating to Management, Certain Security Holders, and Corporate Governance Matters. See also the SEC's Disclosure Effectiveness initiative webapge. 




Edith Orenstein