SEC Modernizes Disclosures for Banking Registrants

Troutman Pepper

On September 11, the U.S. Securities and Exchange Commission (SEC) announced the adoption of rules to update and expand the disclosures that banking registrants provide to investors. The new rule has been long in the making. This is the first substantive change to the statistical disclosure requirements for financial institutions in more than three decades. Nearly one year ago, Troutman Pepper published an alert discussing the SEC’s initial proposal, which has led to today’s final rule. Importantly, the SEC is eliminating Industry Guide 3, Statistical Disclosure by Bank Holding Companies and replacing it with updated disclosure requirements in a new subpart 1400 of Regulation S-K. 

The new rules reflect the significant financial reporting changes that have taken place for banking registrants since the SEC last updated Industry Guide 3, including the issuance of new accounting standards. The new rules apply to bank holding companies, banks, savings and loan holding companies, and savings and loan associations. The key provisions of the new rules require disclosure about the following:

  • distribution of assets, liabilities and stockholders’ equity, the related interest income and expense, and interest rates and interest differential;
  • weighted average yield of investments in debt securities by maturity;
  • maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates;
  • certain credit ratios and the factors that explain material changes in the ratios, or the related components during the periods presented;
  • the allowance for credit losses by loan category; and
  • deposits including average amounts and rate paid and amounts that are uninsured.

Going Forward

The new rules become effective 30 days after publication in the Federal Register and will apply to fiscal years ending on or after December 15, 2021. However, the SEC will accept voluntary compliance in advance of the mandatory compliance date. Industry Guide 3 will be rescinded effective January 1, 2023. A complete copy of the new rules is available here:

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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