January 22, 2018
The SEC Remains Open (For a “Limited” Time Only)
Okay, so the United States of America is (mostly) closed for business – again. Here’s where the SEC stands, according to this announcement that it posted to its website on Friday:
Should there be a federal government shutdown after January 19, the SEC will remain open for a limited number of days, fully staffed and focused on the agency’s mission. Any changes to the SEC’s operational status will be announced here. In the event that the SEC does shut down, we will pursue the agency’s plan for operating during a shutdown. As that plan contemplates, we are currently making preparations for a potential shutdown with a focus on the market integrity and investor protection components of our mission.
So the SEC is open “as usual” for now. We don’t know how long is a “limited number of days” – but that doesn’t sound like a lot. As we blogged on Friday, once the SEC’s operations plan is implemented, there’s not much you’re going to be able to do other than make your Edgar filings. Check out this Cleary memo for more information on the shutdown’s implications for businesses dealing with the SEC & other federal agencies.
This is becoming Uncle Sam’s version of the movie “Groundhog Day” – only absent the laughs. . . Feel like a stroll down memory lane? Here is Broc’s very first shutdown blog from 2011.
Form 10-K: Technical Tips
For a lot of companies, it’s that time of year again – time to get to work on the Form 10-K. For those of you who find yourself in that position, this Gibson Dunn blog has some technical tips to keep in mind. Here’s an excerpt discussing the changes to the cover page, and noting that for some reason the revised form still isn’t on the SEC’s website:
As discussed in our blog post, in April 2017, the SEC adopted technical amendments to conform certain rules and forms to self-executing provisions of the Jumpstart Our Business Startups Act related to emerging growth companies (“EGCs”). The amendments modified the cover page of Form 10-K, along with the cover pages of various other forms including Form 10-Q, to include two additional checkboxes.
The first checkbox allows the company to indicate whether it is an EGC. The second checkbox allows the company to make an irrevocable election not to use the extended transition period for complying with new or revised accounting standards. The PDF of Form 10-K included in the SEC’s official forms list still does not reflect these revisions, so companies will need to look to the adopting release (or to their recently filed Forms 10-Q) to see how the 10-K cover page should be revised.
Corp Fin Reviewers: Tough Graders Lead to Better Reporting
This new study says that who you draw as the Corp Fin reviewer for your filings matters quite a bit – and that tough graders translate into better financial reporting. Here’s the abstract:
Using a sample of SEC comment letters, we show that SEC reviewers’ idiosyncratic style plays an economically and statistically significant role in explaining the cross-sectional variation in filing review outcomes, even after holding firm and disclosure attributes constant. We also show that the reviewer style is persistent across firms and time. Finally, we find that reviewers with a stricter style are associated with improved financial reporting quality. These findings suggest that individual SEC reviewers have significant influence on the SEC filing review process.
I’ll try to keep this in mind the next time I hit Amendment No. 5. . .
– John Jenkins