Congress is set to order the Securities and Exchange Commission to modernize and simplify corporate reporting requirements.
Hidden in the 1,301-page, five-year transportation funding bill agreed to by House and Senate negotiators Tuesday is a requirement that in a year the SEC propose a rule to lower the costs and burdens of companies preparing some of the most basic and popular SEC disclosure statements, such as the annual 10-k and quarterly 10-q.
Congress is also directing the SEC to make the forms more readable and navigable.
The Regulation S-K guidelines for the reports, including lists of company executives and directors and executive compensation, along with material legal costs and fraud enforcement actions against the firm, are extremely comprehensive, said Michael Lowman, a securities attorney in the Washington, D.C., office of the law firm of Jenner & Block.
Contrary to recent rumors, there is nothing in the bill that would stop the SEC from adopting a fiduciary standard for broker-dealers and the Department of Labor from imposing a fiduciary requirement on pension plan advisors.
The transportation measure is expected to be passed by both houses of Congress this week.