As part of its initiative to improve the information provided to shareholders through disclosure requirements, the Securities and Exchange Commission (SEC) voted on August 17 to adopt amendments simplifying the disclosure process for preparers, while retaining information that they believe is most useful for investors to make decisions. These amendments are intended to reduce the compliance burden for public companies without modifying the information available.  
 
Originally proposed in 2016, the amendments modify disclosure requirements in a number of SEC rules, including Regulations S-X, S-K, AB, the Exchange Act, and the Investment Company Act and target those deemed to be duplicative, overlapping or outdated.
 
The majority of the redundant or duplicative disclosures were contained in Regulation S-X, which mostly relates to requirements for the presentation of financial statements. Disclosure topics impacted include, but are not limited to, income taxes, derivatives, consolidation, segment reporting and earnings per share data. 
 
Modifications most impactful to the investment company industry include the long-awaited elimination of disclosing book-based components of distributable earnings on the statement of assets and liabilities, and the duplicative parenthetical presentation requirement of undistributed net investment income (loss) on the statement of changes. 
 
These amendments apply primarily to public reporting companies, including foreign private issuers.  Some of the amendments also apply to other entities regulated by the SEC, including Regulation A issuers, investment advisers, broker-dealers, and nationally recognized statistical rating organizations.
 
The amendments will be effective 30 days from publication in the Federal Register.
  
Please contact a member of your service team, or contact Lori Novak at lnovak@cohencpa.com for further discussion.
 
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.