December 11, 2020

On November 19, 2020, the Securities and Exchange Commission (the “SEC”) adopted final rule amendments to modernize, simplify, and enhance Management’s Discussion & Analysis of Financial Condition and Results of Operations (“MD&A”) and other financial disclosure requirements in Regulation S-K, the disclosure rules applicable to filings made under the Securities Act of 1933 and the Securities Exchange Act of 1934 (the “Exchange Act”).

These amendments will become effective 30 days after publication in the Federal Register. Registrants will be required to comply with the amended rules for their first fiscal year ending on or after 210 days after publication in the Federal Register. Voluntary early compliance with the amended rules will be permitted any time after their effective date, so long as the disclosures are responsive to the amended item in its entirety. During the voluntary early compliance period, a registrant may choose to adopt certain amended items and continue complying with certain current items, but an amended item, if adopted, must be presented in its entirety.

The table linked below outlines what we believe to be the most significant changes adopted. The first two columns of the linked table have been excerpted from the SEC’s adopting release, with our assessment of what the changes mean for reporting companies comprising the right-most column. 

Summary of Amended Rules Table

In addition to the changes discussed in the table above, current Item 303(d), which currently provides that an SRC may provide current Item 303(a)(3)(iv) information for the most recent two fiscal years and is not required to provide the contractual obligations table specified in Item 303(a)(5), has been eliminated by the amendments.

SRCs should provide MD&A disclosure pursuant to new Item 303(b), although they may continue to provide responsive disclosure covering only the two-year period required in Regulation S-X Article 8.

A tabular summary of the new structure of the MD&A disclosure rules is linked below.

Compliance Map of Current and Amended Financial Disclosure Rules Table