SEC Exchange Act Forms Compliance and Disclosure Interpretation 105.09 (C&DI 105.09) provides guidance on several elements of the disclosure simplification amendments described in our recent client alert. Uncertainty about the effective date of the amendments and how they would apply to SEC filings has become an increasingly significant matter as companies approach the filing deadlines for Form 10-Q quarterly reports for the quarter ended September 30, 2018. The adopting release provided that the amendments will be effective 30 days after publication in the Federal Register. As of October 1, 2018, the SEC release adopting the disclosure simplification amendments had not yet been published in the Federal Register. The adopting release did not indicate whether the amendments would be effective for filings made on or after the effective date, or for filings for periods ending (or for periods starting) on or after the effective date.
Although the effective date remains unclear at this time, C&DI 105.09 states that the Staff is providing this guidance “[i]n light of the anticipated timing of effectiveness of the amendments and expected proximity of effectiveness to the filing date for most filers’ quarterly reports.” The effective date of the disclosure simplification amendments could potentially be as early as Thursday, November 1, 2018, if the amendments are published on October 2, 2018. The filing deadlines for Form 10-Q quarterly reports for the quarter ended September 30, 2018, will be November 9 (for large accelerated filers and accelerated filers) and November 14 (for non-accelerated filers and smaller reporting companies).
Action to Take Now
Companies preparing to file Form 10-Q quarterly reports for the quarter ended September 30, 2018, should monitor the effective date of the disclosure simplification amendments and, if the effective date will be on or before the date on which a company files its Form 10-Q quarterly report:
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consider deferring implementation of the requirement to present changes in shareholders’ equity with the interim financial statements to be contained in the Form 10-Q quarterly report, as described below; and
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reflect the other disclosure simplification amendments described in our previous client alert in their upcoming Form 10-Q quarterly reports unless the Staff issues further interpretive guidance.
Effective Date of Amendments
C&DI 105.09 states that the disclosure simplification amendments will be effective for SEC reports and registration statements filed on or after the effective date (30 days after publication in the Federal Register).
Transitional Relief for Changes in Shareholders’ Equity
Solely with respect to the requirement to present the changes in shareholders’ equity in the interim financial statements (either in a separate statement or in a footnote) in quarterly reports on Form 10-Q, as required by Rules 8-03(a)(5) and 10-01(a)(7) of Regulation S-X, C&DI 105.09 indicates that Staff will not object if a company initially presents the changes in shareholders’ equity in its first Form 10-Q quarterly report for the quarter that begins after the effective date of the amendments.