Last Friday, the SEC’s Division of Corporate Finance issued its fourth topic in its CF Disclosure Series, which periodically provides the SEC’s views on various topics.  This time, the SEC addressed, what it believes to be, inconsistent disclosures on European sovereign debt holdings.  The SEC reminds registrants, particularly bank holding companies, of their obligations to identify known trends or known demands, commitments, events, or uncertainties in their MD&A.  Generally, the SEC expects supplemental disclosure to be provided by country, segregated between sovereign and non-sovereign exposure, and financial statement category.  Registrants must focus on countries that are “experiencing significant economic, fiscal and/or political strains such that the likelihood of default would be higher than would be anticipated when such factors do no exist.”  In addition, the SEC expects to see additional risk factors addressing European sovereign debt exposure and heightened disclosures in the market risk discussion.

For a more detailed outline of what disclosure is relevant and appropriate, click here to view the SEC’s complete guidance.