SEC Chairman Atkins announces initiative to reform Regulation S-K

In his announcement, Chair Atkins discussed the two ideals the Commission should follow in considering SEC disclosure reform:

• It must root its disclosure requirements, which are contained in Regulation S-K, in the concept of financial materiality.
• It must scale these requirements with a company’s size and maturity.

On February 17, Chair Atkins elaborated further on the types of reform that he instructed the Commission staff to consider. Drawing from comments received in connection with the executive compensation reform proposal, he identified several additional principles that the SEC could apply in its reform of Regulation S-K’s disclosure rules:

• Rationalizing: The rules should be sensible, with materiality as the focus, and should appropriately calibrate the level of disclosure with the cost.
• Simplifying: Simplification may be necessary where any particular disclosure requires additional disclosure to explain it.
• Modernizing: The rules should account for how industry practices and technology have evolved since the implementation of any related disclosure requirements.

Chair Atkins then offered broader themes to guide the SEC’s framework, including:

• Indirect regulation: That the SEC curtail indirect regulation of corporate governance matters, as he commented has been the indirect effect of its requirements that a company explain certain decisions.
• Impractical disclosures: That the SEC reconfigure impractical disclosure requirements into more workable standards, for example, in circumstances where certain information may be difficult to retrieve or ascertain.

Chair Atkins is also considering the SEC’s shift to a semiannual, rather than quarterly, reporting requirement by companies. With respect to risk factors disclosure, he suggested the SEC could adopt a rule stating that failure to disclose impacts from publicized events that are reasonably likely to affect most companies will not constitute material omissions for purposes of the federal securities laws’ anti-fraud rules, as well as floated the idea that an entity, such as the SEC or the company itself, maintain and publish a set of risks that broadly apply to most companies across most industries which could be published separately outside of the annual report.

Other Insights

In his January 29 speech before the 53rd Annual Securities Regulation Institute, SEC Commissioner Mark Uyeda further suggested the SEC consider the following reforms to Regulation S-K:

• Insider trading policies (Item 408(b)): deleting the requirement that mandates companies explain whether they have an insider trading policy or provide reasons if they do not;
• Related-persons transactions (Item 404): raising the $120,000 de minimis disclosure threshold to one that is better aligned with materiality, or replacing a static number altogether with a principles based approach, and replacing the narrative description of company policies with a requirement for companies to file their policies or make them readily available on their websites;
• Cybersecurity (Item 106): streamlining the narrative disclosures of cybersecurity policies and governance oversight such that the SEC disclosure requirements do not shame or indirectly compel companies to change practices rather than elicit material disclosure as to what the company is doing;
• Unregistered transactions (Item 701): eliminating or modifying the corresponding Form 10-K item that requires a three-year look-back for unregistered sales of securities by the registrant; and
• Performance graphs (Item 201): eliminating the requirement to disclose the five-year performance graph of the issuer’s total cumulative return compared to a broad index and a line-of-business or peer group index.

Scope of Comments

Commentors may consider addressing the areas identified above and any other areas where the requirements of Regulation S-K:

• are duplicative, overly perspective, or not material;
• consistently elicit lengthy, redundant, or disproportionately burdensome information; and
• require disclosures that are redundant and could be streamlined, cross-referenced or modernized.

The SEC will accept public comment suggesting revisions to Regulation S-K until April 13, 2026, and will be publicly available on the SEC's website.

When considering comments, we suggest that companies create an inventory of burdensome disclosure requirements based on past disclosures and investor feedback, and provide concrete examples of issues encountered, as well as specific reforms.

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