United States

Proposed modernization of Regulation S-K Items 101, 103 and 105


The SEC recently issued a proposed rule, Modernization of Regulation S-K Items 101, 103, and 105, which, if finalized, would include the following revisions, among others:

  • Item 101(a), General development of business, as revised, would:
    • Be largely principles-based by providing a non-exclusive list of the types of information that a registrant may need to disclose, and by requiring disclosure of a topic only to the extent such information is material to an understanding of the general development of a registrant’s business
    • Include as a listed disclosure topic, to the extent material to an understanding of the registrant’s business, transactions and events that affect or may affect the company’s operations
    • Eliminate a prescribed timeframe for this disclosure
    • Permit a registrant, in filings made after its initial filing, to provide only an update of the general development of the business that focuses on material developments in the reporting period, and with an active hyperlink to the registrant’s most recent filing that, together with the update, would contain the full discussion of the general development of the registrant’s business
  • Item 101(c), Narrative description of business, as revised, would:
    • Clarify and expand its principles-based approach, by including disclosure topics drawn from a subset of the topics currently in Item 101(c)
    • Include, as a disclosure topic, human capital resources
  • Item 103, Legal proceedings, as revised, would expressly state that the required information about material legal proceedings may be provided by including hyperlinks or cross-references to legal proceedings disclosure located elsewhere in the document
  • Item 105, Risk factors, as revised, would:
    • Require summary risk factor disclosure if the risk factor section exceeds 15 pages
    • Change the disclosure standard from the “most significant” factors to the “material” factors required to be disclosed
    • Require risk factors to be organized under relevant headings