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Chair White Outlines Next Stage of Disclosure Reforms for Senate Hearing

The SEC expects to consider several recommendations from its staff in the near future about its next moves with its Disclosure Effectiveness project, the agency’s chief told a Senate hearing. The agency is likely to consider updating its industry guides as one of the moves.

SEC Chair Mary Jo White testified before a June 14, 2016, Senate Banking Committee hearing that the U.S. market regulator expects to consider several recommendations from its staff in the near future about its next moves in its Disclosure Effectiveness project.

The reforms are likely to include proposed changes to Industry Guide (IG7) No. 7, Description of Property by Issuers Engaged or to Be Engaged in Significant Mining Operations. In February, White had described the agency’s interest in updating its industry guides, which have not been revised in years, to reflect recent changes in the business environment.

White called the Disclosure Effectiveness project “a comprehensive undertaking” intended to have companies make more timely disclosures and improve the information shareholders receive. The SEC is considering moves such as scaling its disclosure rules according to company size.

White said the comments submitted in response to Release No. 33-10064, Business and Financial Disclosure Required by Regulation S-K, a preliminary rulemaking document issued in April, will help the agency review the disclosure rules mandated by the Fixing America’s Surface Transportation (FAST) Act. After that, the agency wants to review the compensation and disclosure rules for proxy filings.

In addition, the SEC is looking beyond what is required by its disclosure rules and considering how companies submit information to it.

“[The SEC] is exploring alternatives that could enhance the way that investors access the disclosures,” White said. “This component of our initiative is of vital importance as technology and investors’ needs and behavior evolve. In the near term, we are working on changes to that would make EDGAR filings more accessible to investors and easier for them to navigate.”

White added that the rule the agency adopted on June 13, Release No. 34-78041, Order Granting Limited and Conditional Exemption Under Section 36(a) of the Securities Exchange Act of 1934 From Compliance With Interactive Data File Exhibit Requirement in Forms 6-K, 8-K, 10-Q, 10-K, 20-F, and 40-F to Facilitate Inline Filing of Tagged Financial Data, should also ease investors’ access to public company information.

A parallel effort to update the disclosure rules for asset managers is at a somewhat earlier stage of development, White told the lawmakers.