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SEC Adopts Significant Amendments to Regulation S-K and Accredited Investor and Qualified Institutional Buyer Definitions
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More Financial Services | Corporate & Business Aricles → Latest Firm's PressWaller The U.S. Securities and Exchange Commission (SEC) has adopted several significant amendments affecting disclosure requirements under Items 101, 103 and 105 of Regulation S-K and also expanded the definitions of “Accredited Investor” and “Qualified Institutional Buyer” under Rule 501(a) and Rule 144A, respectively. As SEC Chairman, Jay Clayton, announced in the press release, Items 101, 103 and 105 have not undergone significant revisions in over 30 years. The Accredited Investor and Qualified Institutional Buyer definitions. meanwhile, have not undergone changes in some time. The changes are part of the SEC’s larger push to streamline disclosure requirements (for example, see our post on the SEC’s disclosure simplification rule updates here) and relax entrance requirements for investing in private capital markets. The amendments come on the heels of other recent modernization efforts by the SEC, which include amendments that allow companies the ability to list directly on NYSE in certain instances, as is discussed in more detail in a recent Waller blog post which can be found here. Regulation S-K Updates The SEC adopted amendments to Item 101 (Description of Business), Item 103 (Legal Proceedings) and Item 105 (Risk Factors) under Regulation S-K. Items 101, 103 and 105 disclosure is required in many SEC filings, including registration statements such as Form S-1, and annual and quarterly reports on Forms 10-K and 10-Q. The SEC noted in its final rule that these amendments were made to enhance the readability of disclosures, discourage repetitive and immaterial disclosures, and reduce compliance burdens on companies. The amendments are summarized in the below table, but the full slate of changes can be found in the SEC’s August 26th press releases that can be found here and here. Disclosure Requirement: Reg S-K Item 101(a) and (c) - Description of Business Item 101(a)
Item 101(c)
Disclosure Requirement: Reg S-K Item 103 - Legal Proceedings
Disclosure Requirement: Reg S-K Item 105 - Risk Factors
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