SEC Adopts Final Rules to Implement FAST Act Disclosure Simplification

The Securities and Exchange Commission voted on March 20, 2019 to adopt amendments to certain disclosure requirements for public companies. These amendments are intended to modernize and simplify disclosure requirements and make it easier for investors to access and analyze material information. Other expected benefits are lower costs and burdens on companies, improved readability and navigability of disclosure documents and reduced repetition of immaterial information.

Some of the disclosure simplifications include the following:

Rule

Summary Description of Amended Rules

Regulation S-K, Item 303 and Form 20-F

Registrants will generally be able to exclude discussion of the earliest of three years in MD&A if they have already included the discussion in a prior filing.

Regulation S-K, Item 601(b)(10) and 601(b)(2)

Registrants will be able to omit confidential information in material contracts and certain other exhibits without submitting a confidential treatment request to the SEC, so long as the information is (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.

Regulation S-K, Item 601(b)(10)

Only new reporting registrants will be required to file material contracts that were entered into within two years of the applicable registration statement or report.

Regulation S-K, Item 601(a)(5)

Registrants will not be required to file attachments to their material agreements if such attachments do not contain material information or were not otherwise disclosed.

Regulation S-K, Item 102

Registrants will need to provide disclosure about a physical property only to the extent that it is material to the registrant.

Regulation S-K, Item 503

Regulation S-K Item 503 (risk factors) will become new Item 105 and the list of example risk factors is being eliminated from the rule in order to emphasize a principles-based approach.

Forms 8-K, 10-Q, 10-K, 20-F and 40-F

Registrants will be required to disclose on the form cover page the national exchange or principal U.S. market for their securities, the trading symbol, and title of each class of securities.

Form 10-K and Regulation S-K, Item 405

The form will no longer have a checkbox to show delinquent Section 16 filers and the Item 405 heading to be used in the proxy statement will now read “Delinquent Section 16(a) Reports.” The heading should now be eliminated altogether if there are no delinquencies to report.

Forms 8-K, 10-Q, 10-K, 20-F and 40-F

Registrants will be required to tag all cover page data in Inline XBRL.

“Incorporation by Reference” rules (Securities Act Rule 411(b)(4); Exchange Act Rules 12b-23(a)(3), and 12b-32; and Regulation S-T Rules 102 and 105

Registrants will no longer be required to file as an exhibit any document or part thereof that is incorporated by reference in a filing, but instead will be required to provide hyperlinks to documents incorporated by reference.

The rules become effective 30 days after their publication in the Federal Register, except for the new cover page data-tagging requirements, which are subject to a three-year phase-in.

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