The amendments will provide for the redaction of confidential and personally identifiable information from certain exhibits without the need to submit a confidential treatment request if specified conditions are met.
They will eliminate the need to discuss the earliest financial year in MD&A for registrants that provide three years of financial statement data.
They will permit the omission of attachments to exhibits if the attachments do not contain material information and that information was not otherwise disclosed; and improve access to information by requiring data tagging and the use of hyperlinks.

On March 20, 2019, the Securities and Exchange Commission (SEC) adopted technical amendments (the Amendments) to its disclosure rules for public companies, investment advisors and investment companies, which will require changes to almost every common SEC report and filing for public companies.

Similar to amendments that went into effect in November 2018 (which Pillsbury described in a prior client alert), the Amendments are in response to a congressional mandate under the 2015 Fixing America’s Surface Transportation Act (FAST Act) that the SEC modernize and simplify Regulation S-K. The Amendments are intended to reduce the burdens associated with duplicative and immaterial disclosure without compromising a public company’s obligation to provide investors with all information necessary to make informed investment decisions.

With respect to public companies, the most significant Amendments are the following:

  • Confidential and Personally Identifiable Information: The Amendments will permit registrants to omit confidential information in material contracts from exhibits without submitting a confidential treatment request, as long as the information is not material and would likely cause competitive harm to the registrant if disclosed. Consistent with current SEC rules, registrants will still be required to mark the exhibit index to indicate that portions of the exhibit have been omitted, prominently indicate on the first page of the redacted exhibit that certain information was omitted and include brackets in the exhibit where the information was omitted. The Amendments do not affect the principles of what a registrant may or may not permissibly redact for reasons of confidentiality. In addition, the Amendments will codify current SEC staff practice to permit registrants to redact personally identifiable information (such as bank account numbers, social security numbers and home addresses) from exhibits, without a requirement to submit a confidential treatment request, if disclosure of such information would constitute a clearly unwarranted invasion of personal privacy.
  • MD&A Discussion of Third Year Financials: The Amendments will permit registrants who provide three years of financial statement data to omit from their MD&A discussion the earliest year, if that discussion was already included in a prior SEC filing. If such discussion is omitted, the registrant must identify the location in the prior filing where the discussion can be found. The Amendments do not affect smaller reporting companies or emerging growth companies that elect to provide only two years of audited financial statements.
  • Attachments to Required Exhibits: Registrants will not be required to file attachments to exhibits if such attachments do not contain material information and that information was not otherwise disclosed. If any such attachments are omitted, the filed exhibit must contain a list briefly identifying the contents of any such omitted attachments (which is already accomplished if that list is already part of the exhibit being filed).
  • Cover Page Interactive Data File: All Forms 10-K, 10-Q and 8-K and annual reports on Forms 20-F and 40-F will be required to have all cover page data tagged in Inline XBRL. Unlike other changes required by the Amendments, these changes will have phased-in compliance dates, which track the phased-in compliance dates for the Inline XBRL rules.

The Amendments include a number of other changes to disclosure rules affecting public companies, including the following:

  • Description of Physical Properties: Registrants will only be required to make disclosure about physical properties to the extent material to the registrant, and registrants will be permitted to provide descriptions of physical properties on a collective basis.
  • Description of Securities: Registrants will be required to file an exhibit with their annual reports that describes each class of their securities registered under Section 12 of the Securities Exchange Act of 1934 (Exchange Act). Incorporation by reference is not permitted for the first such exhibit, but may be done in exhibits to future annual reports. This exhibit will typically require a description of capital stock, but registrants should likewise be cognizant of descriptions of other types of securities also registered under Section 12 of the Exchange Act (such as registered debt, warrants and ADRs listed on a stock exchange).
  • Cover Page Changes: The cover pages of Forms 10-K, 10-Q, 8-K, 20-F and 40-F will require disclosure of the registrant’s securities registered pursuant to Section 12(b) of the Exchange Act, the title of each such class of securities and the name of each exchange on which the securities are registered (all of which are currently required by Forms 10-K, 20-F and 40-F) and the trading symbol(s). In addition, the current disclosure on the cover page to Form 10-K regarding delinquent filers is being deleted.
  • Market for Securities: Registrants will be required to disclose the principal U.S. market(s) where their securities are listed (expanding the current requirement, which is limited to national securities exchanges).
  • Incorporation by Reference: Generally, documents incorporated by reference will no longer need to be filed as exhibits. However, a hyperlink to the information incorporated by reference and information regarding the location of the incorporated information will need to be provided. In particular, registrants should be cognizant of this hyperlink requirement in the “Where You Can Find More Information” section commonly found in prospectuses. Also, the Amendments eliminate the general rule prohibiting the incorporation by reference of documents that have been on file with the SEC for more than five years.
  • Cross-Referencing in Financial Statements: Financial statements will no longer be permitted to cross-reference to disclosure in other parts of a filing or incorporate by reference information from other filings, unless specifically permitted or required by SEC rules, GAAP or IFRS. Accordingly, the financial statements will generally need to contain all information within the financial statements themselves.
  • Calculation of Offering Price: The offering price on the cover page of a prospectus may be omitted if providing a specific offering price would be impractical, so long as the offering price will be determined by a particular method or formula described in the prospectus, and the registrant prominently provides a cross-reference to the location of that method or formula on the cover page.
  • Red Herring Language: The portion of the “red herring” legend in prospectuses relating to state law will not be required for offerings not prohibited by state securities laws. Since most registered securities offerings are exempt from many “blue sky” laws (often because they involve listed securities or senior-to-listed securities), many registrants will be able to omit the last sentence of the red herring legend.
  • Performed Material Contracts: Registrants that do not fall within the new definition of “newly reporting registrant” will not be required to file as an exhibit any material contract entered into within two years that has already been fully performed. (This rule change generally ensures that any registrant that has already attached a material contract to a prior filing need not continue to attach it to future filings.)

Please reach out to one or more of the authors of this client alert if you would like a more comprehensive list of the changes being implemented by the Amendments.

Effective Dates

The Amendments will become effective 30 days after they are published in the Federal Register, except that the Amendments relating to the redaction of confidential information will become effective upon publication in the Federal Register. Calendar-year U.S. public companies should be cognizant of the timing of effectiveness of the Amendments as they prepare and file their Forms 10-Q for the first quarter of 2019.

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