Section 108 of the Jump Start Our Business Startups Actrequired the
SEC to undertake a study of the disclosure requirements of Regulation S-K. Specifically, the statute mandated that the SEC shall:
conduct a review of its Regulation S-K to—
- comprehensively analyze the current registration requirements of such regulation; and
- determine how such requirements can be updated to modernize and simplify the registration process and reduce the costs and other burdens associated with these requirements for issuers who are emerging growth companies.
In addition, the JOBS Act required that the SEC report to Congress its specific recommendations on how to streamline the registration process in order to make it more efficient and less burdensome for prospective issuers who qualify as emerging growth companies.
That report was released not too long ago on December 20, 2013. However, it seems like the Commission elected to punt on the second part of the legislative mandate (i.e., to provide specifics), at least for now. Unfortunately, as is so often the case with governmental studies, the primary recommendation by the SEC Staff was to conduct further studies and investigations. While disclosure reform is complex (and may be politically charged), further studies is not what investors or the capital markets need. Too much money is spent on preparing duplicative and meaningless disclosures.
The report describes in great detail the history and evolution of the disclosure requirements contained in Regulation S-K – the primary source of disclosure requirements for registration statements and periodic reports filed by public companies with the SEC. All of this is well and good for government regulation historians and SEC buffs, but it provides nothing of real value to companies that are or may become subject to these rules and requirements. However, the report provides no real useful guidance to Congress (which may be the point if the SEC would rather control the reform process itself rather than have Congress control the process). Presumably, Congress had included this section in the JOBS Act for a specific purpose: Continue Reading 4th and 108, SEC elects to punt on Regulation S-K disclosure reform