The Securities and Exchange Commission (SEC) has proposed a third group of amendments to its disclosure requirements. The proposals would generally simplify disclosure about a company’s business, emphasizing a principlesbased approach. The proposals would also allow the disclosure requirements in the legal proceedings section to be satisfied by links to legal proceedings disclosure included elsewhere in the report or registration statement. Finally, the proposals would change the disclosure standard for risk factors from the “most significant” to “material,” require a summary of risk factor disclosures if the risk factor section is more than 15 pages, require risk factors to be organized under headings, and discourage risk factors that could apply generically to any company or any offering, but to the extent generic risk factors are presented, require companies to present them at the end of the risk factors section under a separate heading. The appendix to this alert includes the text of the proposed amendments that has been marked to show the proposed changes from current requirements.

The SEC continues to move forward with the updates to its disclosure requirements recommended by the SEC staff in the December 2013 Regulation S-K study prepared under a mandate in the Jumpstart Our Business Startups Act. The SEC previously adopted two rounds of amendments in September 2018 and April 2019. The latest proposals would revise three of the disclosure topics required by Regulation S-K in SEC reports and registration statements: Business (Item 101(a) and (c)), Legal Proceedings (Item 103) and Risk Factors (Item 105), as well as making a series of conforming changes in the text of SEC forms. The proposed amendments are subject to a 60-day public comment period after publication in the Federal Register. Companies should monitor the status of the proposed amendments.