SEC Adopts Amendments to Implement Fast Act Disclosure Modernization and Simplification

Kramer Levin Naftalis & Frankel LLP

On March 20, 2019, the Securities and Exchange Commission (the SEC) voted to adopt amendments to modernize and simplify disclosure requirements for public companies, investment advisers and investment companies. These amendments are expected to benefit investors by eliminating outdated and unnecessary disclosure and making it easier for them to access and analyze material information. Among other things, the amendments simplify disclosure or the disclosure process, including through changes that would allow registrants to omit confidential information from most exhibits without filing a confidential treatment request, and changes to Management’s Discussion and Analysis that allow for flexibility in discussing historical periods; revise rules or forms to update, streamline or otherwise improve the SEC’s disclosure framework by eliminating the risk factor examples listed in the disclosure requirement and revising the description of property requirement to emphasize the materiality threshold; update rules to account for developments since their adoption or last amendment by eliminating certain requirements for undertakings in registration statements; and incorporate technology to improve access to information by requiring data tagging for items on the cover page of certain filings and the use of hyperlinks for information that is incorporated by reference and available on EDGAR. The amendments also include parallel amendments to several rules and forms applicable to investment companies and investment advisers, including amendments that require certain investment company filings to include a hyperlink to each exhibit listed in the exhibit index of the filings, and to be submitted in HyperText Markup Language (HTML) format.

The table below provides further detail on the amendments:  


Summary Description of Amended Rules[1]

Principal Objective

Regulation S-K, Item 303 and Form 20-F

Registrants will generally be able to exclude discussion of the earliest of three years in MD&A if they have already included the discussion in a prior filing.

Simplify disclosure requirements to reduce repetition, reduce costs and burdens to registrants, focus disclosure on material information and improve readability.

Regulation S-K, Items 601(b)(10) and 601(b)(2) and investment company registration forms

Registrants will be able to omit confidential information in material contracts and certain other exhibits without submitting a confidential treatment request to the Commission, so long as the information is (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.

Substantially reduce the burden borne by registrants in preparing and responding to confidential treatment requests while still providing all material information to investors.

Regulation S-K, Item 601(b)(10)

Only newly reporting registrants will be required to file material contracts that were entered within two years of the applicable registration statement or report.

Eliminate duplicative and unnecessary disclosure and reduce costs and burdens to registrants while still providing all material information to investors.

Regulation S-K, Item 601(a)(5) and investment company forms

Registrants will not be required to file attachments to their material agreements if such attachments do not contain material information or were not otherwise disclosed.

Reduce costs and burdens to registrants while still providing all material information to investors.

Regulation S-K, Item 102

Registrants will need to provide disclosure about a physical property only to the extent that it is material to the registrant.

Clarify and simplify the disclosure requirement to reduce costs and burdens to registrants, while focusing on material information.

Forms 8-K, 10-Q, 10-K, 20-F and 40-F

Registrants will be required to disclose on the form cover page the national exchange or principal U.S. market for their securities, the trading symbol and title of each class of securities.

Improve investors’ efforts to search news websites and stock market databases for information about registrants and distinguished among similarly named companies.

Securities Act Rule 411(b)(4); Exchange Act Rules 12b-23(a)(3), and 12b-32; Investment Company Act Rule 0-4; and Regulation S-T Rules 102 and 105

Registrants will no longer be required to file as an exhibit any document or part thereof that is incorporated by reference in a filing, but instead will be required to provide hyperlinks to documents incorporated by reference.

Improve readability and navigability of disclosure documents and discourage repetition

Forms 10-K, 10-Q, 8-K, 20-F and 40-F

Registrants will be required to tag all cover page data in Inline XBRL.

Further enhance investors' use of interactive data to identify, count, sort, compare, and analyze registrants and their disclosures

Regulation S-T Rules 102 105, 201, 202 and 311; Form N-CSR; and investment company registration forms

Investment companies will be required to file reports on Form N-CSR and registration statements and amendments thereto in HTML format and provide hyperlinks to exhibits and other information incorporated by reference. 

Improve navigability of disclosure.


The full text of the SEC final rule release can be found here.

The amendments will be effective 30 days after they are published in the Federal Register, except that the amendments relating to the redaction of confidential information in certain exhibits will become effective upon publication in the Federal Register. The requirements to tag data on the cover pages of certain filings are subject to a three-year phase-in, depending on the nature of the filer. All investment company registration statement and Form N-CSR filings made on or after April 1, 2020 must be made in HTML format and comply with the rule and form amendments pertaining to the use of hyperlinks.


[1] The information in this chart is not comprehensive and is intended only to highlight some of the more significant aspects of the final amendments. It does not reflect all of the amendments or all of the rules and forms that are affected. All changes are discussed in their entirety in the final rule release linked below. As such, this table should be read together with the complete text of such release.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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