On August 26, 2020, the Securities and Exchange Commission (SEC) adopted amendments to modernize disclosure requirements in Regulation S-K Item 101 (business description), Item 103 (legal proceedings), and Item 105 (risk factors). As we previously discussed here, the SEC proposed the amendments in August 2019 to improve the readability of disclosure documents, discourage disclosure of immaterial or repetitive information, and simplify compliance efforts for registrants. The amendments have been adopted largely as proposed, with certain modifications.

The SEC stated that the amendments, while prescriptive in some respects, are intended to emphasize a principles-based approach to disclosure, which allows registrants to decide what information is material to investors, tailored to each registrant's individual facts and circumstances. Through implementation of the amendments, the SEC aims to "facilitate an understanding of a registrant's business, financial condition and prospects through the lens through which management and the board of directors manage and assess the performance of the registrant." The amendments are summarized below. Redlines reflecting the differences between the current and amended Items 101, 103, and 105 of Regulation S-K appear as Annexes A, B, and C, respectively. Continue reading >