SEC Adopts Amendments to Modernize and Enhance Management’s Discussion and Analysis and other Financial Disclosures

November 19, 2020

Published: SEC

The Securities and Exchange Commission today announced that it has voted to adopt amendments that will modernize, simplify and enhance certain financial disclosure requirements in Regulation S-K. The amendments are intended to enhance the focus of financial disclosures on material information for the benefit of investors, while simplifying compliance efforts for registrants.

“Today’s rules will improve the quality and accessibility of the disclosure that companies provide their investors, including, importantly giving investors greater insight into the information management uses to monitor and manage the business,” said SEC Chairman Jay Clayton. “The improved approach to these disclosures reflects the broad diversity of issuers in our public markets and will allow investors to make better capital allocation decisions, while reducing compliance burdens and costs and maintaining strong investor protection.”

“I want to thank the staff in the Division of Corporation Finance and our other divisions and offices for their work on today’s rules and, more generally, for their work to modernize and improve our disclosure system as our markets and economy have evolved,” continued Chairman Clayton. “The dedication of our staff to ensure that our disclosure-based regulatory system remains effective, efficient and mission-oriented is critical to the growth and continued leadership of our public capital markets.”

The amendments reflect the Commission’s long-standing commitment to a principles-based, registrant-specific approach to disclosure. This approach, as applied to Management’s Discussion and Analysis, should yield material information relevant to an assessment of the financial condition and results of operations of the registrant, and allow investors to view the registrant from management’s perspective. The amendments are also intended to improve disclosure by enhancing its readability, discouraging repetition and eliminating information that is not material.


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