Yesterday, the SEC’s Investor Advisory Committee met to discuss public company disclosure reform and proxy voting by funds, and to consider a recommendation regarding the tokenization of equity securities.

On the topic of disclosure reform, the remarks of Chairman Paul Atkins noted a goal of moving to “a minimum effective dose of regulation” by using materiality as the north star, scaling disclosure requirements with a company size and maturity and moving away from “regulation by shaming” in the SEC’s disclosure requirements. In her remarks, Commissioner Peirce emphasized that disclosure reform should address companies spending a lot of time and attention preparing disclosures that may obfuscate, rather than add to the mix of information on which investors rely, citing certain mandatory executive compensation tables. The remarks of Commissioner Uyeda noted that effective disclosure requires significant effort, and that the SEC should consider reforms to reduce unnecessary burdens on public companies without compromising investor protection and capital raising.

In the panel discussions on disclosure reform that followed, panelists discussed the importance of financial statements and MD&A to investors. A panelist noted that the Commission could provide more guidance as to the standard of materiality, recognizing that materiality determinations with respect to any given topic can vary from company to company based on their circumstances. The panel explored the pros and cons of moving away from quarterly reporting, as well as the concept of more scaled disclosure based on company size. The length and complexity of risk factor disclosure was discussed, and the panelists identified several areas of Regulation S-K that could be significantly revised or eliminated.

– Dave Lynn