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Unnecessary disclosures targeted by SEC

Publisher: Journal of Accountancy
Author: Ken Tysiac

In a speech at the Forum for Corporate Directors, SEC Commission Daniel Gallagher stated that a targeted, step by step approach is the best way for the SEC to review and overhaul its financial disclosure requirements under securities laws.

“I would prefer to address discrete issues now rather than risk spending years preparing an offensive so massive that it may never be launched,” Gallagher stated. Here is a preview of some of the issues Gallagher said the SEC may need to focus on:

  • Layering disclosures: This would mean making key information easily available in a standardized format, while making additional details available elsewhere.
  • Streamlining Form 8-K disclosures: “Does each of the categories of information now required to be disclosed on Form 8-K really require almost immediate disclosure when a change occurs?” Gallagher asked.
  • Streamlining Form 8-K disclosure:  “Does each of the categories of information now required to be disclosed on Form 8-K really require almost immediate disclosure when a change occurs?” Gallagher asked.
  • The potential of technology:  Gallagher suggested testing a standardized system that would require one-time online disclosure of basic corporate information, mandating that it be updated as necessary with changes tracked. “We have not come anywhere close to realizing the potential technology holds for improving our disclosure system,” Gallagher said.

For full access to Gallagher’s proposed reforms, click here

SEC Commissioner Gallagher brings some very interesting proposals to the table. What is your opinion on his proposed reforms and the implications it may have in dealing with unnecessary disclosures?

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