November is a good time to confirm plans for SEC reporting and capital markets transactions in the next year. To assist public companies in keeping track of the various filing deadlines, we have prepared a desktop reference calendar that sets forth filing deadlines for many SEC reports. To assist companies with planning capital markets transactions, including IPOs, our calendar also provides the staleness dates for 2019 (i.e., the last date financial statements may be used in a prospectus or proxy statement without being updated).
Securities Regulation
The SEC Adopts Strategic Plan for 2018-2022
On June 19, 2018, the Securities and Exchange Commission (the “SEC") published a draft strategic plan outlining the SEC’s priorities through 2022 (the “Plan Draft"). As previously reported, the Plan Draft comprised three broad goals: focusing on retail investors, increasing innovation, and strengthening performance.
SEC Division of Corporation Finance Provides Interpretive Relief on New Disclosure Requirement
On September 25, 2018, the Division of Corporation Finance of the Securities and Exchange Commission (the “Staff") issued a new Compliance and Disclosure Interpretation (“C&DI") providing transition guidance and relief on reporting requirements under the disclosure update and simplification rules adopted on August 17th, 2018 (the “Final Rules"). As discussed in our recent post (available here), the Final Rules become effective 30 days from publication in the Federal Register, but do not indicate whether the amendments should be applied to periodic reports covering periods ending on or after the effective date or to all periodic reports filed after the effective date. ( As of the date of this posting, the Final Rules have still not been published in the Federal Register.) The timing is significant because the Final Rules require companies’ quarterly reports on Form 10-Q to include a new statement of changes in stockholders’ equity and to disclose the amount of dividends per share for each class of shares with respect to the interim period.
Important Reminders for Upcoming 10-Q Filings
As calendar year filers begin preparing their Forms 10-Q for the third quarter, there are a few items they should keep in mind.
Potential Impact of SEC’s New Disclosure Update and Simplification Release
SEC Streamlines Disclosure Requirements as Part of its Overall Disclosure Effectiveness Review
On August 17, 2018, the Securities and Exchange Commission (the “Commission") adopted several dozen amendments (available here) to “simplify compliance without significantly altering the total mix of information" (the “Final Rules"). In Release No. 33-10532, the Commission characterized the amended requirements as redundant, duplicative, overlapping, outdated or superseded, in light of subsequent changes to Commission disclosure requirements, U.S. GAAP, IFRS and technology developments.
The PCAOB’s Draft Strategic Plan: Overview and Outlook
On August 10, 2018, the Public Company Accounting Oversight Board (PCAOB or Board) released a draft of its five-year strategic plan and sought public comment on the plan through September 10, 2018. This represents the first time that the Board has solicited public input to a draft strategic plan, and follows the Board’s announcement in April of a public survey to permit stakeholder input on the strategic plan even in advance of the draft’s release. In a speech on May 17, 2018, at the Deloitte/University of Kansas Auditing Symposium (Kansas Speech), PCAOB Chairman William D. Duhnke III announced that after the public comment period, the Board plans to finalize the strategic plan in November 2018.[1]
SEC Modifies XBRL Filing Requirements
On June 28, 2018, the Securities and Exchange Commission (the “SEC") adopted a final rule, Inline XBRL Filing of Tagged Data, which substantially alters requirements related to the use of the eXentsible Business Reporting Language (“XBRL") format in operating companies’ financial statement information and funds’[1] risk/return summary information. The rule was published in the Federal Register on August 16, 2018, available here, and will be effective on September 17, 2018.
SEC Proposes to Substantially Lighten Financial Disclosures for Issuers and Guarantors of Registered Debt
On July 24, 2018, the Securities and Exchange Commission (the “Commission") proposed amendments to Rules 3-10 and 3-16 of Regulation S-X (available here) in an effort to “simplify and streamline" the financial disclosures required in offerings of certain guaranteed debt and debt-like securities (collectively referred to as “debt securities"), as well as offerings of securities collateralized by securities of an affiliate of the registrant, registered under the Securities Act of 1933, as amended (the “Securities Act"). These proposed changes would, if implemented, facilitate greater speed to market for such public offerings, significantly reducing the Securities Act disclosure burdens for such registrants, as well as reducing the registrant’s disclosure obligations in its subsequent annual and interim reports required under Securities Exchange Act of 1934, as amended (the “Exchange Act"). Taken together, the proposed changes represent a significant liberalization of the current disclosure requirements.
House of Representatives Adopts Bipartisan Financial Reform – JOBS Act 3.0
On July 17, 2018, the U.S. House of Representatives overwhelmingly passed, by a vote of 406-4, bipartisan financial reform legislation titled the “JOBS and Investor Confidence Act of 2018," frequently referred to as JOBS Act 3.0. The JOBS Act 3.0 builds upon the 2012 Jumpstart Our Business Startups (“JOBS") Act, and on the Fixing America’s Surface Transportation Act (the “FAST Act"), which was enacted in 2015 and is commonly referred to as JOBS Act 2.0.
SEC Amends “Smaller Reporting Company” Definition to Expand Access to Scaled Disclosure Accommodations
On June 28, 2018, the United States Securities and Exchange Commission (the “SEC") approved amendments to the definition of a “smaller reporting company" (a “SRC"). These amendments will expand the number of registrants qualifying for SRC scaled disclosure accommodations in their SEC filings. These scaled disclosure accommodations include, among other things, reduced required business, financial and executive compensation disclosures. A chart briefly summarizing the SRC disclosure accommodations is attached as Exhibit A.