October 12, 2017

SEC Proposes Fast Act Rules to Simplify S-K

Perhaps you thought the FAST Act was way behind us – but remember the SEC still hasn’t adopted some rules required by Dodd-Frank. Yesterday, the SEC proposed a variety of rules and form changes as required by the FAST Act. Here’s the 253-page proposing release; we’ll be posting memos in our “Disclosure Effectiveness” Practice Area. In this blog, Cydney Posner highlights some of the proposals, including:

1. Limit the period-to-period comparison required in MD&A to only the two most recent fiscal years presented in the financials, so long as the earlier period discussion is no longer material to understanding the financials and it has been included in the previous 10-K.

2. Allow companies to omit or redact confidential information from material contract exhibits that is not material and would cause competitive harm if publicly disclosed, without having to submit an unredacted copy and prior formal request to the Corp Fin Staff, as is currently required. This is intended to change process only & will not be intended to change the substantive requirements.

3. Limit the two-year “look back” requirement for exhibits to apply only to newly reporting companies.

4. Clarify that disclosure regarding properties is required only to the extent that the property is material.

5. Require inline XBRL tagging for all cover page information – and require the cover page to include the (tagged) ticker symbol for each class of securities registered under the Exchange Act.

6. Require disclosure of legal entity identifiers (“LEIs”) for the company & any significant subsidiaries identified on Exhibit 21.

7. Require links to information incorporated by reference from previously filed documents.

In this blog, Ning Chiu does a great job of listing the seven ways that periodic reporting could change…

Pay Ratio: How to Handle PR & Employee Fallout

For those coming to next week’s “Pay Ratio & Proxy Disclosure Conference,” you’ll hear tidbits about the hot “employee reaction” topic all day long – but particularly during the panel entitled “Pay Ratio: How to Handle PR & Employee Fallout.” Recently, as noted in this press release, Willis Towers Watson found that this was the topic of largest concern when it surveyed companies. Here’s an excerpt:

Indeed, roughly half of the respondents polled (49%) cited forecasting how their employees will react to the ratio disclosure as their number one challenge, but that other challenges still loom. About four in 10 (39%) said determining the consistently applied compensation measure (CACM) is their great challenge followed by getting accurate pay data (38%), deciding how to craft their required disclosure (37%) and determining where their pay ratio stands compared with that of their peers, their industry and the market (35%).

Also see this Parker Poe blog – and this “HRE Daily” article

More on Our “Proxy Season Blog”

We continue to post new items regularly on our “Proxy Season Blog” for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– More on “Showing Off Your Directors Via Video”
– Shareholder Proposal Reform: Keith Higgins Wades In…
– Showing Off Your Directors Via Video
– Proxy Season: Steps to Take Now to Prepare
– Online Disclosure & Mobile IR Websites: S&P 500 Study

Broc Romanek