IPA Comments on SEC’s Modernization of Regulation S-K
The Investment Program Association, a trade organization representing the direct investment industry, sent a letter to the Securities and Exchange Commission outlining their position on Regulation S-K, which details the disclosure requirements for public companies.
Earlier this year, the SEC requested public comment on modernizing certain business and financial disclosure requirements in Regulation S-K, as well as how the commission could improve the effectiveness of company disclosures.
The IPA’s legal and regulatory committee, with input from the non-listed REIT, non-listed BDC and due diligence committees, made the following recommendations:
• While registrants and investors would benefit from updated industry guides*, it would be detrimental to incorporate the industry guides into Regulation S-K. *Industry guides provide instructions on disclosure compliance for particular industries.
• Auditors should not be required to attest to the reliability of management’s discussion and analysis. Increased use of cross-references and hyperlinks would eliminate unnecessary repetition of information disclosed in previous filings or in other sections of the same filing.
• The length of risk factor disclosure could be reduced through a safe harbor or a rule change to enumerate the risks a registrant should not include in its disclosure.
• Emerging growth companies should be able to take advantage of scaled disclosure requirements to the same extent as smaller reporting companies.
To read the letter in its entirety, click here.
The Investment Program Association was founded in 1985 and supports individual investor access to a variety of asset classes not correlated to the traded markets and historically available only to institutional investors. These include non-traded REITs, business development companies, energy and equipment leasing programs, and private equity offerings.
