As I noted just yesterday, disclosure rationalization is an important aspect of SEC Chair Paul Atkins’ goal to “transform” the SEC rulebook to help Make IPOs Great Again. To that end, we’re tracking responses to his call for comments on Regulation S-K – which is where most of the line-item disclosure requirements are spelled out.

The SEC has received over 100 comments so far! These include letters from individual investors, researchers, and many other key market participants and trade groups, such as:

– Business Roundtable

– Center for Audit Quality

– Council of Institutional Investors

– International Corporate Governance Network

– Nasdaq – Also see Nasdaq’s blog with 5 key takeaways from their letter

– Society for Corporate Governance

– US Chamber of Commerce

One thing that struck me when scanning through the letters is that there is not much across-the-board consensus on what the SEC should do and how onerous and detailed the disclosure requirements should be. That’s not too surprising given the diverse perspectives of the groups submitting comments – the corporate issuer crowd tends to want to go one way and the investor crowd tends to want to go the other way. But it does underscore why the SEC is trying to check all the procedural and informational boxes during its current rulemaking endeavors.

This Goodwin blog highlights topics that many of the letters address and the divergent views that are presented. Here are selected excerpts (check out the entire blog, co-authored by our very own Dave Lynn, for more details):

1. Principles Based Disclosure Versus Prescriptive Disclosure – Some commenters advocate for grounding disclosure requirements in materiality and urge the SEC to adopt a principles-based approach that would allow companies to determine, based on their specific facts and circumstances, whether particular information is material to investors.

Commenters who oppose a shift to the principles-based approach counter that increased company discretion creates a risk of under-disclosure.

Several commenters support a hybrid approach, proposing the elimination of clearly immaterial or redundant disclosure requirements while maintaining specified disclosure requirements in key areas.

2. Specific Line-Item Recommendations – The disclosure framework debate is also found in comments regarding specific line-item disclosure requirements under Regulation S-K, where views of commenters diverge on whether particular requirements should be reduced, eliminated, or expanded. The divide is sharpest between those advocating for a streamlined, materiality-focused disclosure framework and those emphasizing the importance of maintaining or enhancing standardized requirements to support comparability and investor protection.

3. Safe Harbors and Liability Reform – Commenters expressed differing viewpoints on whether securities law liability drives the prevalence of boilerplate and immaterial disclosure.

Some commenters argue that litigation risk is a primary driver of defensive disclosure practices, contending that the risk of securities fraud claims encourages companies to include generic, overly broad or immaterial information to mitigate liability exposure. As a result, disclosure is often drafted to satisfy legal requirements rather than to communicate material information. To address these concerns, these commenters advocate for expanded safe harbors and interpretive guidance, including protections for omission of widely known or non-company-specific risks; enhanced coverage for forward-looking statements; and broader, materiality based safe harbors.

Other commenters oppose the creation or expansion of safe harbors from anti-fraud liability, arguing that such liability is fundamental to the integrity of the disclosure regime.

4. ESG and Governance Disclosures – Several comment letters raise the concern that certain Regulation S-K requirements function as indirect regulation rather than as a means for providing material disclosure to investors. This tension is particularly acute with respect to ESG-related disclosures, in which commenters expressed differing views as to the purpose of these disclosure requirements.

5. Scaling and Differentiation by Company Size and Industry – A recurring theme in the comments is whether Regulation S-K should apply uniformly to all companies or whether the disclosure requirements should be scaled to a company’s size, stage of development, or industry.

Several commenters argue that smaller and newly public companies face disproportionate compliance burdens under the current disclosure requirements. These commenters call for scaling the disclosure framework based on company size, with specific proposals including raising filer thresholds, exempting smaller issuers from certain rules (e.g., executive compensation, cybersecurity, and climate-related disclosures), and reducing reporting frequency.

Other commenters express concern that scaled or industry-specific disclosure requirements can negatively affect comparability and investor protection. . . . These commenters recommend streamlining disclosure requirements for all companies to avoid information asymmetry and loss of comparability.

6. Modernization of Disclosure Format – Commenters also addressed the format and delivery of public company disclosures, particularly regarding whether the SEC should expand, maintain, or scale back requirements for structured, machine-readable data such as XBRL.

Some commenters express concerns about the cost and complexity of structured data, recommending substantially scaling back or eliminating XBRL tagging. Proposals include limiting Inline XBRL to primary financial statement line items, eliminating narrative block tagging, and exempting small reporting companies and nonaccelerated filers entirely.

Other commenters emphasize the importance of structured, machine‑readable data for enabling comparability, automation, and AI‑driven analysis. They recommend expanding XBRL to currently untagged narrative sections, including MD&A, risk factors, and qualitative proxy disclosures, arguing that limiting XBRL would increase reliance on manual data extraction and reduce comparability and reliability.

I know a lot of people in our community are investing many hours and brain cells in making suggestions, so it really will be interesting to see how the SEC’s proposal – if and when it’s issued – reflects the feedback. I’m pleased to have worked with my Cooley teammates on this letter – see this blog for a summary of the recommendations – and I am also pleased that it’s now in the SEC’s court!

– Liz Dunshee