On January 30, the Securities and Exchange Commission voted to propose amendments to certain financial disclosure requirements in Regulation S-K, in an effort to modernize and simplify such requirements. The SEC also issued new guidance relating to key performance indicators and metrics.

The SEC has proposed the following amendments and guidance to Regulation S-K:

Elimination of Items 301 Selected Financial Data and 302 Supplementary Financial Information

To simplify disclosure requirements in light of modern technological developments and reduce the repetition of non-material information, the SEC proposed eliminating the requirements that registrants provide 1) five years of selected financial data and 2) two years of selected quarterly financial data.

Amendments to Item 303 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The SEC proposed various amendments to Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), including:

  • adding a new Item 303(a) to succinctly state and clarify the principal purposes of MD&A and streamline the instructions;
  • eliminating the specific requirement to discuss the impact of inflation and price changes, though a discussion of such matters would still be required if the trend shows they have had or are reasonably expected to have a material impact on net sales, revenue or income from continuing operations (Item 303(a)(3)(iv) Results of Operations (Inflation and Price Changes));
  • replacing the requirement that a registrant discuss off-balance sheet arrangements with a requirement to integrate disclosure of off-balance sheet arrangements within the broader context of MD&A (Item 303(a)(4), Off-Balance Sheet Arrangements);
  • eliminating the requirement to provide a contractual obligations table (Item 303(a)(5) Contractual Obligations);
  • permitting registrants to compare the most recently completed quarter to either the corresponding quarter of the prior year, as currently mandated, or to the immediately preceding quarter (Item 303(b) Interim Periods); and
  • requiring disclosure of critical accounting estimates.

Other proposed amendments to MD&A would require disclosure of known events reasonably likely to cause a material change in costs and revenues; codify existing interpretive guidance requiring the discussion of reasons underlying material changes in net sales or revenues and require disclosure of material cash requirements (including capital expenditures commitments); and the anticipated source of funds and general purpose of such material cash requirements.

Amendments Relating to Foreign Private Issuers

The proposed revisions include parallel amendments to Forms 20-F and 40-F relating to foreign private issuers (FPIs), intending that MD&A requirements for FPIs continue to mirror the substantive MD&A requirements in Item 303 of Regulation S-K.


The SEC also issued new guidance providing that, where registrants disclose key performance indicators or metrics, they should also consider the extent to which additional disclosure relating to the metrics is necessary in light of existing MD&A requirements and to ensure that the presentation of the indicators or metrics, in light of the circumstances under which they are presented, is not misleading. The guidance further provides a reminder for registrants to consider whether they have effective controls and procedures in place to process information related to the disclosure of key performance indicators and metrics to ensure consistency and accuracy.

Commenters have 60 days following publication in the Federal Register to submit comments to the proposed amendments, which is available here. The guidance is available here.