The U.S. Securities and Exchange Commission (SEC) is proposing rule amendments for registrants that aim to improve disclosure for investors, and simplify compliance for firms.
In particular, the SEC said, “the proposed amendments are intended to improve the readability of disclosure documents, as well as discourage repetition and disclosure of information that is not material.”
Among other things, the proposed amendments would introduce a more principles-based approach to disclosing the material aspects of registrants’ businesses; allow firms to use online links and cross references to disclose material legal proceedings; and increase the threshold for disclosing environmental proceedings from $100,000 to $300,000.
“The world economy and our markets have changed dramatically in the more than 30 years since the adoption of our rules for business disclosures by public companies. Today’s proposal reflects these significant changes, as well as the reality that there will be changes in the future,” SEC chairman Jay Clayton said in a statement.
“I applaud the staff for their efforts to modernize and improve our disclosure framework, including recognizing that intangible assets, and in particular human capital, often are a significantly more important driver of value in today’s global economy. The proposals reflect a thoughtful mix of prescriptive and principles-based requirements that should result in improved disclosures and the elimination of unnecessary costs and burdens,” he added.
The proposals will go out for a 60-day public comment period.