Simplifications to Regulation S-K adopted by the SEC on August 17, - - PDF document

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Important Ways The SEC Has Simplified Reporting Requirements ACC Northeast Chapter Presenters: Howard E. Berkenblit, Partner at Sullivan Jeffrey B. Morlend, Partner at Sullivan Nina Andersson-Willard, Vice President, Senior Counsel M&A and Securities at Iron Mountain September 12, 2019

Simplifications to Regulation S-K adopted by the SEC on August 17, 2018 and effective as

• f November 5, 2018:

Regulation S-K Item Affected Rule Change Forms Affected Description of Business Item 101 Eliminated requirement to disclose segment financial information per Item 101(b), including restatement of prior periods when reportable segments change and discussion of interim segment performance that may not be indicative of current or future operations.  Information still required in notes to the financial statements Form 10-K Form 10-Q (as applicable per Item 303 MD&A) Registration Statements Eliminated requirement to disclose amount spent on research and development activity for all years presented per Item 101(c)(1)(xi) and Item 101(h)(4)(x).  Trend information related to research and development activities and expenses, where material, still required per Item 303 Form 10-K Registration Statements Form 20-F and Form 1-A (corresponding amendments) Eliminated requirement to disclose financial information by geographic area per Items 101(d)(1) and 101(d)(2), as well as any risks associated with an issuer’s foreign operations and any segment’s dependence on foreign operations per Item 101(d)(3).  Information still required in notes to the financial statements and per Item 503(c) (risk factors); Item 303(a) also amended to add explicit reference to “geographic areas” in disclosure requirements regarding trends and uncertainties by segment Form 10-K Form 10-Q (as applicable per Item 303 MD&A) Registration Statements Eliminated requirement to discuss, when interim financial statements are presented, facts that indicate the three-year Form 10-K

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financial data for geographic performance may not be indicative of current or future operations per Item 101(d)(4).  Item 303(a) amended to add explicit reference to add explicit reference to “geographic areas” as example of subdivision of a business required to be discussed when management believes such discussion would be appropriate to an understanding

• f the business

Form 10-Q (as applicable per Item 303 MD&A) Registration Statements Eliminated requirement to identify SEC Public Reference Room and disclose its physical address and phone number, but all issuers must disclose SEC internet address and statement that electronic SEC filings are available there per Item 101(e)(3). Form 10-K Registration Statements Form 20-F and Form F-1 (corresponding amendments) All issuers now required to disclose their internet address, if they have one, per Item 101(e)(2) and Item 101(h)(5)(iii). Form 10-K Registration Statements Form 20-F and Form F-1 (corresponding amendments) Market for Registrant’s Common Equity Item 201(a)(1) Where primary shares are traded on a principal U.S. exchange, eliminated requirement to provide high and low sale prices for two prior fiscal years. Instead, issuers with

• ne or more classes of common equity required to disclose

principal U.S. market(s) where each class is traded and trading symbol(s) for each class of common equity per Item 201(a)(1). Foreign issuers also required to identify the principal foreign public trading market, if any, and the trading symbol(s), for each class of their common equity. Form 10-K Registration Statements Form 20-F (corresponding amendments) Warrants, Rights and Convertible Instruments Item 201(a)(2)(i) Eliminated requirement, where the class of common equity has no established U.S. public trading market, to disclose amount of common equity subject to outstanding options, warrants or convertible securities per Item 201(a)(2)(i).  Information still required in notes to the financial statements Form S-1 Form 10

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Dividends Item 201(c)(1) Eliminated requirement to disclose frequency and amount of cash dividends declared per Item 201(c)(1).  Still required to disclose amount of dividends in interim periods per Rule 3-04 of Regulation S-X  Certain disclosures regarding restrictions that currently or are likely to materially limit issuer’s ability to pay dividends on its common equity (including restrictions on the ability of issuer’s subsidiaries to transfer funds to it in the form of cash dividends, loans or advances) per Item 201(c)(1) consolidated into single requirement per Rule 4-08(d)(2) of Regulation S-X Form 10-K Registration Statements MD&A – Seasonality Item 303(b) (Instruction 5) Eliminated requirement to provide interim seasonality disclosures per Instruction 5 to Item 303(b).  Information still required in notes to the financial statements; issuers also still required to provide annual seasonality disclosures per Item 101(c)(1)(v) Form 10-Q Supplementary Financial Information Item 302(a) Eliminated all references to “extraordinary items”, including replacing required disclosure of “income (loss) before extraordinary items and cumulative effect of a change in accounting” with “income (loss) from continuing

• perations” and reference to “per share data based upon

such income” with “per share data based upon income (loss) from continuing operations” and “per share data based upon net income (loss)”, per Items 302(a)(1) and 302(a)(3). Form 10-K Registration Statements Ratio of Earnings to Fixed Charges Items 503(d), 503(e) and 601(c) and Item 1010(a)(3) of Regulation M-A Eliminated requirement, for issuers that register debt securities, to disclose historical and pro forma ratios of earnings to fixed charges per Items 503(d), 503(e) and 601(c) and Item 1010(a)(3) of Reg. M-A.  Also eliminated corresponding exhibit per Item 601(b)(12) (see below) Form 10-K Form 10-Q Registration Statements Form 20-F (Instruction 7) (corresponding amendments)

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Exhibits Item 601 Eliminated requirement to provide the following Item 601 exhibits:  601(b)(11): Computation of earnings per share in annual filings  601(b)(12): Computation of earnings to fixed charges  601(b)(19): Incorporation of report furnished to security holders by reference into Form 10-Q  601(b)(22): Published report regarding matters submitted to vote of security holders  601(b)(26): Invitations for competitive bids  601(c): Computation of earnings to fixed charges Form 10-K Form 10-Q Form 8-K Registration Statements (All as applicable)

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Further disclosure simplifications adopted by the SEC on March 20, 2019 and effective as

• f May 2, 2019 (note: the amendments to the rules governing the redaction of confidential

information in material contracts became effective on April 2, 2019):

Regulation S- K Item Affected Rule Change Forms Affected Exhibits Item 601 Confidential Treatment Requests: May redact from exhibits filed under 601(b)(10) (material contracts) and 601(b)(2) (plans of acquisition, reorganization, arrangement, liquidation or succession) confidential information that is not material and would cause a company competitive harm if made public without first filing a CTR, so long as (i) the exhibit index is marked to indicate that portions of the redacted exhibit have been omitted, (ii) a prominent statement is included on the first page of the redacted exhibit that certain information has been excluded from the exhibit because it is both not material and would be competitively harmful if publicly disclosed, and (iii) brackets are included to indicate where the information has been omitted from the filed version of the exhibit. May also omit personally identifiable information (i.e., information the disclosure of which would be “a clearly unwarranted invasion of personal privacy,” such as bank account numbers, social security numbers, home addresses and similar information) from exhibits without the need for a CTR or other conditions. See Item 601(a)(6). Form 10-K Form 10-Q Form 8-K Registration Statements (All as applicable) Schedules and Exhibits to Material Contracts: May omit attachments to material contracts if such attachments do not contain material information or were not otherwise disclosed. Required to instead provide with each filed exhibit a list briefly identifying the contents

• f the omitted attachments to the extent such information is not

already included in the exhibit. See Item 601(a)(5). Material Contracts - Two Year Period: Except for newly reporting companies, no longer required to file material contracts that were fully performed but entered into less than two years before the applicable filing. See Item 601(b)(10)(i). Documents Incorporated by Reference – 5 Year Limitation: Eliminated the five year limit for incorporation by reference without being under an exception (including documents identified by file number). See Item 10(d). Cover Page Interactive Data File: Required to file new exhibit for “Cover Page Interactive Date File” per changes to cover page as noted below. See Item 601(b)(104).

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Exhibits – New Requirement Item 601(b)(4) New Exhibit for Description of Registered Securities: New requirement to file as an exhibit a brief description of the company’s registered securities. Note that currently must provide such descriptions in registration statements; the amendments expand this requirement as a new exhibit to annual report filings. Form 10-K Form 20-F (corresponding amendments) Properties Item 102 Required disclosure for physical properties limited to only physical properties that are material to the company. Form 10-K Registration Statements MD&A Item 303 Discussion of the earliest of the three year period covered by the financial statements may be excluded, so long as such discussion has already been included in a prior filing and the location in the prior filing where the omitted discussion may be found is identified. Form 10-K Form 10-Q (as applicable per Item 303 MD&A) Registration Statements Form 20-F (corresponding amendments) Compliance with Section 16(a) of the Exchange Act Item 405 May omit disclosures regarding Section 16 reports if all reports have been timely filed. Section heading for disclosure (if required) changed from “Section 16(a) Beneficial Ownership Reporting Compliance” to “Delinquent Section 16(a) Reports”. Heading is not required where there are no delinquent reports to disclose. Eliminated check-the-box disclosure on the cover of Form 10-K (see below). Form 10-K Proxy Statements Corporate Governance Item 407 Audit committee requirement to state whether it has discussed with the independent auditor the matters required by AU section 380, Communication with Audit Committees, changed to refer more broadly to “the applicable requirements” of the PCAOB and the SEC. See Item 407(d)(3)(i)(B). For emerging growth companies, compensation committee not required to state whether it has reviewed and discussed the Compensation Discussion and Analysis section, nor whether it recommended to the board that the CD&A be included in the annual report or proxy statement (since EGCs not required to include CD&A). See Item 407(g). Proxy Statements Form 10-K (Compensation Committee amendment

• nly)

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Risk Factors Item 503(c) Risk Factors moved from Item 503(c) to new, separate Item 105. Eliminated the list of examples for risk factors in the rules to emphasize the SEC's principles-based approach to risk factor disclosure. Form 10-K Form 10-Q Registration Statements Incorporation by Reference Financial Statements. In any financial statements, incorporating by reference, or cross-referencing to, information outside of the financial statements is not permitted unless otherwise specifically permitted or required by the SEC rules or by GAAP or IFRS, whichever is applicable. Documents Incorporated by Reference: No longer required to file as an exhibit any document or part thereof that is incorporated by

• reference. Instead, must provide hyperlinks to the information or

documents that are incorporated by reference and identify the location of the information in the document (where applicable). See Securities Act Rule 411 and Exchange Act Rule 12b-23. Forms 10-K, 10-Q, 8-K, as applicable Registration Statements Prospectuses The amendments also created new requirements for the cover page of Forms 8-K, 10-Q, 10-K, 20-F and 40-F: Stock Exchange Listing: Required to disclose the national exchange or principal U.S. market for the company’s securities, their trading symbol and the title of each class of securities. XBRL Tagging. Information must appear in HTML format and be tagged in Inline XBRL. See Regulation S-T and EDGAR Filer Manual for covered information.  Phased in over three years beginning June 15, 2019:

• Large accelerated filers - reports for fiscal periods ending on or after June 15, 2019
• Accelerated filers - reports for fiscal periods ending on or after June 15, 2020
• All other filers - reports for fiscal periods ending on or after June 15, 2021

Section 16 Disclosures. As noted above, eliminated the check-the-box requirement on the cover of Form 10-K regarding Section 16 disclosures.