TheCorporateCounsel.net

Earlier this week, I delved into the new disclosure required under Item 5 of Part II of Form 10-Q that is responsive to Item 408(a)(1) of Regulation S-K, which requires issuers to disclose whether, during the issuer’s last fiscal quarter, any director or officer adopted or terminated: (i) any contract, instruction or written plan for the purchase or sale of securities of the issuer intended to satisfy the affirmative defense conditions of Rule 10b5–1(c); and/or (ii) any “non-Rule 10b5–1 trading arrangement.”

The questions just keep rolling in on this new disclosure requirement, and a member recently asked this question on our “Q&A Forum” (#11,757):

Pursuant to Item 408(a)(3), the disclosure provided pursuant to Item 408(a)(1) and (2) must be provided in an Interactive Data File as required by 17 CFR 232.405 (Rule 405 of Regulation S–T) in accordance with the EDGAR Filer Manual. When no director or officer has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter and the issuer discloses “none” or includes “negative” disclosure in response to Item 5 of Part II of Form 10-Q, should this disclosure be tagged?

John responded “Yes” to this inquiry.

Why we need Inline XBRL tagging of this sort textual disclosure is beyond me, but that is a whole other debate there. I must admit that I have never been president of the XBRL fan club. Nevertheless, you will want to get this right so you can continue to check the “Yes” box on the cover page of your periodic reports in response to the question “Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).”

– Dave Lynn