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Upcoming Proposal May Offer Path for Cutting Old Disclosure Rules

The SEC has scheduled a vote on issuing a proposal to get rid of some public company disclosure rules regulators believe are out of date or been made redundant by more recent requirements. The proposal is being planned at a time when regulators have been discussing instituting reforms to their rules as part of their Disclosure Effectiveness project.

The SEC is scheduled to meet on July 13, 2016, and vote on issuing a proposal to get rid of some public company disclosure rules that market regulators believe are out of date or have been made redundant by more recent requirements.

The agenda on the SEC’s meeting page offers few details on the upcoming proposal, but the meeting comes amid a lengthy effort by SEC officials to implement their Disclosure Effectiveness project, which was launched largely at the behest of public companies who want the agency to get rid of disclosure rules that they consider out of date or no longer necessary. Investors have often said that they are concerned the project could result in less information being made available to shareholders and weaken their ability to assess a stock’s value.

To date, the SEC has issued a handful of documents as part of the project. Release No. 33-9929, Request for Comment on the Effectiveness of Financial Disclosures About Entities Other Than the Registrant, was published in September 2015 to gather opinions about the SEC’s disclosure rules in Regulation S-X for acquisitions, subsidiaries in which a parent company has a minority interest, and other affiliated businesses. Reg S-X covers the rules for financial statements that have to be filed with the SEC. The comments were due in November.

In April 2016, the SEC published Release No. 33-10064, Business and Financial Disclosure Required by Regulation S-K, as a preliminary step in its rulemaking process to gather views about the agency’s plan to update the disclosure rules in its Regulation S-K. Reg S-K is the set of rules that cover information outside the financial statements that companies must provide in their annual and quarterly reports and offering documents for securities sales. Comments are due on July 21.

In June the SEC published Release No. 33-10098, Modernization of Property Disclosures for Mining Registrants, to propose changes to the disclosure rules for mining companies. The comments are due on August 26.

Also in June, SEC Chair Mary Jo White testified at a House hearing that the agency “has undertaken a comprehensive assessment of the effectiveness of our disclosure regime for investors and issuers.”

The meeting agenda also calls for the SEC to vote on a final rule for reporting information about financial swaps, which is one of the agency’s remaining pieces of unfinished business from the 2010 Dodd-Frank Act. The agenda also includes a vote on a proposal to amend the rules for providing institutional investors with information about the handling of their trade orders and some changes to the agency’s procedural rules for its in-house administrative hearings.