SEC Adopts Amendments to Modernize and Simplify Regulation S-K

Buchanan Ingersoll & Rooney PC
Contact

Buchanan Ingersoll & Rooney PC

On March 20, 2019, the United States Securities and Exchange Commission (SEC) amended a variety of its rules to modernize and simplify disclosure requirements for public companies, investment companies and investment advisers. The amendments were adopted largely as originally proposed in October 2017 (see our previous post). The amendments were intended to benefit investors by eliminating outdated and unnecessary disclosure and by making it easier for investors to access and analyze material information. The amendments revised the SEC's requirements relating to (i) Management’s Discussion and Analysis (MD&A); (ii) redaction of confidential information and other exhibit-related matters; (iii) incorporation by reference; and (iv) other disclosure-related items.

The amendments will become effective 30 days after they are published in the Federal Register. However, amendments relating to the redaction of confidential information in certain exhibits will become effective immediately upon publication in the Federal Register. The new 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, as outlined below.

Management’s Discussion and Analysis

Instruction 1 to Item 303(a) of Regulation S-K previously required discussion of the three-year period covered by the financial statements in a filing. Discussion about the earliest of the three years may now be omitted if such discussion was already included in a registrant’s prior filings on EDGAR that required disclosure in compliance with Item 303 and a statement is included identifying the location in the prior filing where the omitted discussion may be found. This amendment does not affect (i) smaller reporting companies (SRCs) since they already may limit disclosure to the two-year period covered by their financial statements or (ii) emerging growth companies providing only two years of audited financials in their initial public offering.

In addition, instruction 1 to Item 303(a) of Regulation S-K was also amended to eliminate the reference to year-to-year comparisons to avoid the suggestion that any one mode of presentation is preferable to another.

Corresponding amendments were made to the comparable requirements of Item 5 of Form 20-F for foreign private issuers.

Redaction of Confidential Information and Other Exhibit-Related Matters

Redaction of Confidential Information from Certain Exhibits

Item 601(b)(2) (relating to plans of acquisition, reorganization, arrangement, liquidation or succession) and Item 601(b)(10) (relating to material contracts) of Regulation S-K have been revised to permit registrants to omit or redact confidential information from exhibits filed pursuant to these items if the information is not material and would likely cause competitive harm if publicly disclosed. Prior to the amendments, a registrant was required to submit a detailed confidential treatment request to the SEC for these exhibits. Now, companies can simply (i) mark the exhibit index to indicate that portions of the exhibit(s) have been omitted; (ii) include a prominent statement on the first page of the redacted exhibit that certain identified information has been excluded from the exhibit because it is both not material and would likely cause competitive harm if publicly disclosed; and (iii) indicate with brackets where the information has been omitted from the filed version of the exhibit. The adopting release indicates that the Commission's staff will assess, as part of its ongoing selective review of registrants' filings, whether redactions being made meet the required standard and may request a registrant's justification for the redactions.

Item 1.01 of Form 8-K (relating to material definitive agreements) was also revised to permit these redactions in an exhibit if a registrant elects to file an exhibit relating to that item with the intent to incorporate it by reference in a future filing to satisfy Item 601(b)(10) of Regulation S-K.  

Schedules

A new paragraph (a)(5) was added to Item 601 of Regulation S-K to permit the omission of schedules and similar attachments to all exhibits filed under Item 601, so long as they do not contain material information and the information is not otherwise disclosed in the exhibit or the disclosure document. Companies are instead required to file with each exhibit a list briefly identifying the contents of the omitted schedules.

Two-Year Look Back for Material Contracts

The amendments limit the two-year look back requirement for Regulation S-K Item 601(b)(10)(i) material contract exhibits to apply only to "newly reporting registrants." "Newly reporting registrants" are:

  • companies that are not subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 at the time of filing;
  • companies that have not filed an annual report since the revival of a previously suspended reporting obligation; and
  • shell companies, other than business combination related shell companies, immediately before completing a transaction causing it to cease being a shell company if they have not filed a registration statement or a Form 8-K since the completion of that transaction.

As a result, companies that are not newly reporting registrants will only be required by Item 601(b)(10)(i) to file material contracts not made in the ordinary course of business that are to be performed in whole or in part at or after the filing of a registration statement or report.

Exhibit Requirements for Foreign Private Issuers

Form 20-F has been amended to conform the exhibit requirements for foreign private issuers to the changes that are being made to the exhibit requirements under Item 601 of Regulation S-K.

Required Hyperlinking of Documents Incorporated by Reference

Rule 411 and Rule 12b-23 are being amended to require hyperlinks to information that is incorporated by reference if that information is available on EDGAR. The requirements for incorporating hyperlinks are similar to the requirements for exhibit hyperlinks, including requiring documents that are subject to hyperlinking to be filed in HTML.

Other Disclosure-Related Items

Description of Property (Item 102)

The amendments clarify that Item 102 of Regulation S-K requires disclosure regarding a property only if that property is material to the company. The industry specific requirements for mining, real estate, and oil and gas companies were not revised by these amendments.1

Compliance with Section 16(a) of the Exchange Act (Item 405)

The amendments eliminate the requirement for insiders to furnish Section 16 reports to the company on paper. Furthermore, the caption related to Section 16 reporting delinquencies is changed from “Section 16(a) Beneficial Ownership Reporting Compliance” to “Delinquent Section 16(a) Reports.” Companies are encouraged to exclude this heading altogether when they have no Section 16(a) delinquencies to report. The checkbox on the cover page of Form 10-K relating to Item 405 disclosures has been removed and registrants may now rely only on Section 16 reports filed on EDGAR (as well as any written representations from the reporting persons) to determine whether there are any Section 16 delinquencies to disclose.

Risk Factors (Former Item 503(c))

The amendments relocate “Risk Factors” from Item 503(c) to a new item (Item 105) as Subpart 100 of Regulation S-K covers a broad category of business information and is not limited to offering-related disclosure. Also, the current enumerated examples of potential risk factors were eliminated to reinforce the item’s principles-based approach and to encourage companies to focus on the risks significant to their specific businesses.

Tagging Cover Page Data

The amendments require that all of the information on the cover pages of Form 10-K, Form 10-Q, Form 8-K, Form 20-F and Form 40-F appear in HTML format and be tagged in Inline XBRL, requiring companies to file with each of those forms a “Cover Page Interactive Data File.” The amendments also require that the cover pages of these forms include the trading symbol for each class of registered securities and added to the cover page disclosure for Form 10-Q and Form 8-K the same information on a company's securities that had previously only been required on the cover pages of Form 10-K, Form 20-F, and Form 40-F.

The SEC has provided for phased compliance dates for the requirements to tag data on the cover pages of Form 10-K, Form 10-Q, Form 8-K, Form 20-F and Form 40-F in Inline XBRL. Domestic filers will be required to comply beginning with their first Form 10-Q for a fiscal period ended on or after the applicable compliance date described below. As an example, a Form 10-Q filer in the first phase-in group with a calendar fiscal year end will be required to begin compliance with its Form 10-Q for the period ending June 30, 2019. As a further example, a Form 10-Q filer in the first phase-in group with a June 30 fiscal year end will be required to begin compliance with its Form 10-Q for the period ending September 30, 2019. The date of compliance depends on the category of filer as follows:

Operating Companies
Compliance Date

Large accelerated filers that prepare their financial statements in accordance with U.S. GAAP

Reports for fiscal periods ending on or after June 15, 2019

Accelerated filers that prepare their financial statements in accordance with U.S. GAAP

Reports for fiscal periods ending on or after June 15, 2020

All other filers

Reports for fiscal periods ending on or after June 15, 2021

Prohibition of Incorporation by Reference in Financial Statements

The amendments prohibit incorporating by reference or cross-referencing into financial statements information outside of the financial statements unless otherwise specifically permitted or required by the SEC's rules or by United States Generally Accepted Accounting Principles or International Financial Reporting Standards, whichever is applicable.

Other Changes

The amendments also made a variety of minor changes to disclosures relating to corporate governance (Item 407 of Regulation S-K), registration statement and prospectus provisions (Items 501, 508, and 512 of Regulation S-K), and to the requirement to file documents incorporated by reference as exhibits (Securities Exchange Act Rule 12-23(a)(3), Securities Act Rule 411(b)(4), and Item 601(b)(13) of Regulation S-K).

[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.

© Buchanan Ingersoll & Rooney PC | Attorney Advertising

Written by:

Buchanan Ingersoll & Rooney PC
Contact
more
less

Buchanan Ingersoll & Rooney PC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.