The SEC’s Disclosure Update & Simplification Proposal

Last July, the SEC proposed an “update and simplification” of its disclosure rules. The roots of this  project came from the JOBS Act of 2012, and its growth was hurried along by the FAST Act of 2015.

The proposal has some good things going for it, like removing references to implementation dates for standards that were implemented years ago, or references to long-superseded standards. It’s not the stuff of investor interest. It might benefit someone in the national office of an accounting firm who’s been charged with compiling an SEC rule compliance checklist for use in audit engagements! (God bless that person, whoever they may be.)

The proposal might impact investors negatively. There are quite a few proposed deletions and integrations with FASB disclosures that remove specific disclosure requirements and rely on the FASB’s more general, judgment-based requirements for disclosures to be made. Don’t count on richer disclosures if those proposals come to pass.

I’ve put together my own comment letter, which you can access here. Though the comment period has passed, the Commission will still accept any thoughts you have. It wouldn’t hurt if investors let them know what they want. Just use the quick comment form here.

 

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