By George Wilson
In an earlier post, we suggested eliminating Selected Financial Data and quarterly information disclosures in Form 10-K. This was based on the early transition option in the SEC’s Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information Final Rule.
The change in administrations in Washington, D.C. has created the possibility of a change in the effective date of the new rule. In a January 20, 2021, Presidential Action titled “Regulatory Freeze Pending Review,” the new administration provides this guidance:
3. With respect to rules that have been published in the Federal Register, or rules that have been issued in any manner, but have not taken effect, consider postponing the rules’ effective dates for 60 days from the date of this memorandum, consistent with applicable law and subject to the exceptions described in paragraph 1, for the purpose of reviewing any questions of fact, law, and policy the rules may raise. For rules postponed in this manner, during the 60-day period, where appropriate and consistent with applicable law, consider opening a 30-day comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by those rules, and consider pending petitions for reconsideration involving such rules. As appropriate and consistent with applicable law, and where necessary to continue to review these questions of fact, law, and policy, consider further delaying, or publishing for notice and comment proposed rules further delaying, such rules beyond the 60-day period. Following the 60-day delay in effective date:
a. for those rules that raise no substantial questions of fact, law, or policy, no further action needs to be taken; and
b. for those rules that raise substantial questions of fact, law, or policy, agencies should notify the OMB Director and take further appropriate action in consultation with the OMB Director.
A deferral of the effective date is not automatic. The SEC would have to take action to defer the effective date. With the uncertainty of whether the Commission will act it is likely not prudent to make these changes now.
As always, your thoughts and comments are welcome!