Disclosure Requirements

On September 9, the Market Risk Advisory Committee of the Commodity Futures Trading Commission (CFTC) approved some “plain” English disclosures concerning the risks of executing new derivative transactions involving interbank offered rates (IBORs) that will be replaced by new benchmark rates in the relatively near future. The disclosures, which are not mandatory, are intended as “helpful examples” of the information that market participants should share, as appropriate, with all clients and counterparties with whom they continue to transact derivatives referencing London Interbank Offered Rate (LIBOR) and other IBORs. They are drafted for use on a transaction-by-transaction basis, but alternatively can be delivered as part of general risk disclosures. The disclosures will be submitted to the CFTC for consideration.
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On August 8, the Securities and Exchange Commission proposed amendments to modernize the required disclosures under Regulation S-K regarding a company’s business description, legal proceedings and risk factors (the Proposal). The Proposal is part of the Staff’s disclosure effectiveness initiative to improve its disclosure regime for investors and registrants. The Proposal would implement a more principles-based approach with respect to the disclosure rules relating to the registrant’s business description and risk factors. The SEC notes that its aim for using such an approach, as opposed to prescriptive requirements, would be to “elicit more relevant disclosures” about the items because the current requirements “may not reflect what is material to every business.” The following are key elements of the proposed amendments.
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On May 22, the UK Financial Conduct Authority (FCA) published a statement welcoming the launch by the Cost Transparency Initiative (CTI) of finalized and industry-ready templates for the standardized disclosure of costs and charges to institutional investors in the asset management sector.
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On May 3, the European Securities and Markets Association (ESMA) published final reports on technical advice to the European Commission (EC) on integrating sustainability risks and factors in the core EU asset management directives:

  1. the Undertakings for the Collective Investment in Transferable Securities (UCITS) Directive;
  2. the Alternative Investment Fund Managers Directive (AIFMD); and
  3. the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR).


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The Securities and Exchange Commission has extended the compliance dates for amendments to Rule 606 of Regulation National Market System (NMS) that were adopted in November 2018.

The amendments to Rule 606 require specific additional disclosures for broker-dealers, including disclosure upon customer request of information relating to a customer’s NMS stock orders submitted on a not held basis. The amendments also include public quarterly disclosure of information relating to NMS stock orders submitted on a held basis.
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On November 2, the Securities and Exchange Commission adopted amendments to Rule 606 of Regulation NMS in order to require broker-dealers to provide certain individualized disclosures to customers with respect to the firm’s handling and execution of orders. This disclosure would only be required upon the request of a customer in connection with certain orders

On August 10, the staff of the Securities and Exchange Commission published A Small Entity Compliance Guide for Issuers (the Guide), which summarizes and explains rules adopted by the SEC with respect to the recently amended definition of “smaller reporting company” and the accommodations available to smaller reporting companies. The Guide is one of a

On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”).
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