As anticipated, in an open meeting today, the SEC adopted amendments to Regulation S-K Items 101 (description of business), 103 (legal proceedings), and 105 (risk factors) substantially as proposed (see the August 2019 proposed rule Fact Sheet and associated Society Alert report), and very much consistent with our current principles- and materiality-based disclosure scheme. Based on the SEC's release and Fact Sheet, the amendments are largely consistent with the Society's October 2019 comment letter. A table on pages 8 - 10 of the rule release summarizes the amendments compared to current disclosure requirements.
Notably, as proposed and adopted, the amendments (Item 101(c)) expressly require disclosure of the company's human capital resources to the extent such disclosures would be material to an understanding of the company's business (rule release pages 52 - 54). SEC Chair Clayton commented:
Also particularly notable is the modified quantitative disclosure threshold for certain environmental proceedings involving a governmental authority (Item 103) from $100,000 to $300,000, subject to the company's flexibility to select a different not-to-exceed threshold (lesser of $1 million or 1% of company assets) based on materiality.
The final rules are effective 30 days after publication in the Federal Register.
See also these statements from Commissioners Roisman and Peirce and dissenting statements from Commissioners Lee and Crenshaw. We will be posting law firm memos and other commentary on our Disclosure Reform page » Regulation S-K Items 101, 103, 105.