Concept release comment

CONCEPT RELEASE: BUSINESS AND FINANCIAL DISCLOSURE REQUIRED BY REGULATION

Request comment number

Personal comments

DISCLOSURE FRAMEWORK1 SEC should consider including a sunset provisions in the new disclosures. It must be evaluated based on the

complexity, the size of the changes and impact on the disclosure. This review should be based on individual items without sunshine meeting involvement

2 The advantage is that the staff will make sure that the required change is implementable. The problem with the process is that it may require more waiting time. That said, this process is in the best interest of commonality in the disclosure practice and comparability among registrants

3 Registrants and investors will not like this long process, but the bottom line is that investors will be served at the end. There are a lot of costs related to implementation, uncertainty and delayed risk taking will occur with the use of sunset provisions

4 The input of staff is very necessary in the overall strategy the commission has to approve in order to land softly with this process and new disclosure. To repeat myself, the staff study will bring more lights to the type of registrants and its investors ready for new rules and when. The staff study will be a good input if it takes into accounts the practical sense of this planned adoption process while examining registrants and investors’ concerns for possible incremental implementation

5 A committee composed of representatives of investing public experts and staff experts can meet, discuss and provide some recommendation to the commission related to this project to deal with the proliferation of technology while providing to the investing public a transparent and less asymmetric information disclosure

6 There is nothing wrong with the actual system, what we have to do is to revisit some thresholds because some are outdated and some needs to take into consideration the size of the organization. Also, the materiality definition does not need any change

7 We should balance presenting requirements by inserting industry based principle disclosure requirement in order to preserve the benefits of prescriptive requirements, commonality disclosure and comparability among registrants

8 The advantage of the principle based approach is that this disclosure can focus on what is specific on that organization. Its disadvantage is that the management can use its discretion to camouflage bad data. In addition, there is not commonality in the disclosure. There is reputational cost of the principle based approach because sophisticated investors cannot trust the disclosure without reservation. At the same token, registrant will always complaint about the prescriptive based approach shifting control from management to regulators

9 Registrants do not think that it is difficult because when they are unsure, they can rely on their power to disclose anything in their favor. I don’t believe that voluntary disclosure in the filing is provided with intent to camouflage any data or for aggressive disclosure activities. Some registrants believe that it is the only way they can help readers to understand their organization through the eyes of their top management. But, also too much unwanted voluntary disclosure is provided to distract the readers because something is wrong in the disclosure, to fatigue the readers with too voluminous disclosure or to wall up true and real data of the organization

10 Thresholds are helpful in the disclosure and they can inform investors more about the organization’s performance. I personally prefer a percentage of revenues or assets as quantitative thresholds that means the focus should be on financial health (condition) of the organization (what about peer competition, they should/can be found online)

11 The staff must develop a combination of qualitative and quantitative thresholds to help the investing public to examine the organization

1 | Research conducted by Arthur Mboue

12 Surely, registrants find principles based disclosure too helpful in preparing disclosure. This approach gives them the opportunity to tell the story the way they want. For investors, registrants do not have incentive in truly disclosing bad results

13 Principle based disclosures will affect the whole disclosure system because the ball will be on the executives camp

14 Registrants should make sure their disclosure is addressed to an average reasonable investor. That means someone with an acceptable knowledge in finance, accounting, financial reporting, securities regulation coupled with knowledge of forms, content and more or he must just have history and reputation of making himself investment and voting decision after reliance to the disclosures. If the registrant overestimates the level of its investing public readers it will provide too much information including graphs, ratios, charts, tabular representation, something its readers will find too much to digest. If the registrant underestimates the level of its investing public, it will provide too little information helping its readers to believe that it is hiding bad data or any other skeleton in this type of disclosure (closet). Taylor the disclosure to the subset of the investor community is preferable but the rule just requires and should require the disclosure to be addressed to the average reasonable investor. That means, if he/she is a subset of the investor community, it will be great but no everyone will understand what he reads in the disclosure, this is the true reality, it is nobody fault.

15 SEC should keep the rules to require disclosure that is formatted to provide information to reasonable investor and help them to make investment and voting decisions

16 When the disclosure is addressed to sophisticated investor, it is full of ratios, charts, and graphs and then textual disclosure. It makes the disclosure too voluminous and complex. The disclosure can not possibly be tailored for the novice and less educated, why? Finance, financial reporting and securities regulation will never be too simplified

17 This information is accessible through SEC.gov and company website (IR), some companies send e-mail alerts to their e-subscribers about the availability of newly filed 10-K, 10-Q and ARS. Sophisticated investors can access these filed documents as soon as they are posted by the SEC through a 3rd party provider. This new instant system may or may not violate fair disclosure (FD)

18 Any testing about investors use and access to the disclosure will not provide any meaningful data to the staff19 Normally, novice investors with less education and training in financial disclosure may tend to use 3 rd party

analysis or just market price of the organization to make their investment decision20 Professional securities analysts are sophisticated investors, they prefer disclosure prepared with a lot of

ratios, charts, graphs in order to shift control from average investors to professional paid analysts21 Confidential treatment, scaled disclosures, No Action Letters, waivers, extensions are just main

accommodations used to lessen the toll of the disclosure. There is another impending accommodation called clawback rules (new Rule 10 D-1 gives rights to the compensation committee to seek to recover payments of incentive compensation if the performance results leading to the payment are later subject to downward adjustment or restatement of financial or non-financial performance), it is related to executive compensation. The benefits of the disclosure are legal costs, reputational value and others can be sometimes quantified by reviewing the trend in the SEC enforcement actions.

22 In addition of scaled disclosures and confidential treatment, we have NAL, extensions and other waivers, what we can do is to improve these rules and processes and fix them properly

23 On 21 and 22, I gave main benefits and costs we must evaluate for disclosure effectiveness initiativeINFORMATION FOR INVESTMENT AND VOTING DECISIONS-CORE COMPANY BUSINESS INFORMATION

24 The problem with item 101(a)(1) is the requirement of the year which the registrant was organized and its form of organization because all websites of companies must contain this information as a basic. I have no problem with the fact that form 8-K (item 1.03 and 2.01) requires the same types of information. It is a good repetition keeping the registrants from abuses of excuses argument about lack of reliance

25 Item 101(a)(1) is not that bad, removing the requirement of the year which the registrant was organized and


its form of organization will make it better. I do not mind keeping the 5 years requirement, but the alternative if any will be 4 or 3 years requirement

26 This disclosure is not as useful as it seems to. It would be better to require registrants to provide a description of its business as currently conducted. In addition, the registrant can provide a discussion of any material changes that have occurred in the last 5 years

27 I will not recommend any revision of item 101 (a)(1) to require a disclosure of a registrant’s business strategy. Although some investors may need this disclosure, it can result in a huge competitive cost to the registrant. Let say may be with a different definition of ‘business strategy’, it may work.

28 A summary disclosure of the general development of a registrant’s business in all filings except the initial filing will work better. That said there’s no need for a more detailed disclosure of a registrant’s business

29 Sophisticated investors are most likely to value the information required by item 101(a)(1)30 The cost of providing the disclosure required by item 101(a) is not clear when registrant has to exactly

provide anticipated material acquisition of plant or equipment and anticipated material change in number of employees. I do not have any figure of the change as a result of anticipated regulation changes

31 101(c) still provides useful information to the investors. I believe that backlog disclosure needs to be relocated in the MD&A, giving the opportunities for the registrants to discuss issues surrounding backlog like production, plants, distance, inventory space,… In addition, I do not believe that registrants need to be required to disclose the names of their customers. They can do so if they choose to but this disclosure can result to competitive costs. At the same token, I do not want registrants to file for confidential treatment every time they are making any disclosure

32 In a competitive industry, it can create unnecessary filing for confidential treatment I want to reduce this cost and its impact

33 The election of tabular disclosure and charts can improve the quality of this disclosure especially when the registrant is experiencing changes

34 General description of the business is not useful at this location (may be business section)35 Industry specific disclosure can bring some lights on how some registrants deal with certain issue like

backlogs,…in this industry but it must be done based on prescriptive approach or registrants will choose to disclosure what will help their market shares prices.

36 13 items requirements in item 101c are too much, it will require a checklist or you will forget to disclose information related to some requirements

37 101c is important and should be required in every 10-K from EGC to highly accelerated filers38 Some information currently disclosed in the description of business can be discussed in the MD&A39 Requirements should be based on materiality (tests) because we are called to simplify the disclosure and

remove all unnecessary facts. This kind of disclosure will create less camouflage of bad data and more focus on information needed to make voting and investment decisions. We can only develop a prescriptive disclosure system with options to registrants to exercise their rights for voluntary disclosure, something closer to decision based approach.

40 Sophisticated investors will find 101c very useful with all its 13 items requirements. Some tabular representation and charts can improve its quality and serve its readers including profession sophisticated investors better

41 It is no easy to quantify the cost of this disclosure but for competitive reason we should avoid disclosing data with adverse effect on competition or requiring regular filing of confidential treatment

42 We should enhance the disclosure of item 101(c)(iv) to include copyrights and other IP. There is nothing to define with this list, we should only add copyright and other IP

43 I believe it is good to add other IP for industry based approach, each industry will add what the registrant thinks it will help its readers and investors to understand its specific industry

44 It does not matter the registrant has a lot of IP, it must be based on its disclosure and materiality test. A tabular disclosure will be easy to digest for average reasonable investor, it must focus on expiration date


(with or without renewal clause of a major IP)45 It will not help the whole philosophy and potential legal challenge of it, leaving the industry guides including

pharmaceutical, technology, manufacturing,…, the opportunity to guide these specialized registrants in the best interest of the investing public and transparency

46 Disclosure of specific expiration date of IP,.. ., can lead to experts exodus while making the registrant vulnerable to its competitors.

47 Disclosure about government contracts is very important when it is material. Remediation action can be added because this outsourcing is one of the best contractual arrangements

48 It depends on materiality, if a government contract is material, it does not matter than the registrant is not a government contractor, investors mostly sophisticated one will be best informed with the full disclosure of the government contract (IBNR, remediation, arbitration,…). But discussion about this outsourcing can be located in the MD&A

49 We should keep this current disclosure of item 101(c)(1)(xii) the way it is now50 This disclosure is important to investors if it is material because it has legal and reputational costs, it is

appropriate where it is located now51 We should require all disclosures about material effects that other regulation may have on registrant’s

capital expenditures, earning and competitive positions52 The current disclosure requirement is sufficient53 We should require registrants to describe or discuss foreign regulations impacting their operations and

financial conditions. This information will help investors evaluate foreign operation and make informed investment decision

54 Disclosure of the number of employees help investors understand the quality or vitality of the operation including overstaffed or not, full time, part time and independent contractors. This disclosure can help investors’ readers to understand how the company manages risk related to its human capital.

55 This information is not really useful because of its forecasting approach. But it does give idea of the growth forecasted by the new registrant itself

56 Full Time, Part Time, independent contractors, domestic, foreign employees’ categories will help the investor readers to understand how the registrant is managing risk related to its human capital. Also average years with the company, union and non-union members will help to measure the level of commitment and happy workforce that means productivity

57 As long as the registrant is paying its workforce, it can count them with a little additional cost. It is why it must produce a specific number of workforces because it reduces the company reputational costs. There is not organization without workforce; the workforce is the nucleus of the company. Ever the robotization of the workforce will not eliminate the workforce, it is why investors need this information in order to understand how the nucleus is (will) performing (perform).

58 Disclosure about union membership, robotization of the workforce, difficulty of hiring good experts and employees’ commitment could find good location in the MD&A. A simple tabular disclosure can increase the quality and attractiveness of this disclosure.

59 Outsourcing and subcontracting arrangements can create huge costs to the registrant; it is why when it is material, registrant must disclose these arrangements, their names, and experiences, the types of arrangements, monitoring and review systems if it is included in the clause.

60 Item 102 cannot be eliminated. For some industries with less material plant, offices and other real estate impacting their operation, this disclosure can be relocated in the MD&A section. It will be improved over there with a discussionThe whole issue for investors is how many properties a registrant rents, owns and/or leases. I will add that rent or buy status shows some kind of commitment in the area, availability of liquidity, availability of fixed assets, long term strategy plan or other interpretations

61 The current disclosure of item 102 is sufficient to investor as far as I am concerned. If disclosed compliantly,


it will help investor make an informed investment and voting decisions.62 Like I said, the disclosure about registrant headquarters, offices spaces and vacancy and other facilities is

important to its investors or potential investors and readers63 Enhanced disclosure about property disclosure out of MD&A can be required only for manufacturing, retail

and alike industries.64 During rapid growth, the availability and costs of properties can increase for registrant with a little set aside

space and vacancy. It is why some of these risks should be forecasted and discussed.65 Sophisticated investors are more likely to value the information required by item 10266 Oil and gas industry technically comply with this rule without the approval of any confidential treatment

because of secrecy surrounding undeveloped and developed wells and competitive environment. There is a need for change to reduce the number of confidential treatment filing and competitive costs. These changes will restore some friendship between the regulators and the registrants from this specialized industry.INFORMATION-COMPANY PERFORMANCE, FINANCIAL INFORMATION AND FUTURE PROSPECTS

67 Item 301 is important to investors. I do not know why five year information on this tabular representation, 4 or 3 years will not hurt

68 We can afford to eliminate item 301 because of 3rd party offer of this table. Its elimination will not increase its costs to investors because it will be available on line may be for free. No additional effort will be provided to access this information for free

69 If we retain it, we should modify it with a few years and reduced instruction 2 to abide to instruction 1 ’the purpose of the selected financial data should be to supply in a convenient and readable format selected financial data which… ‘

70 The problem of 5 year trend is that the item 303 does not longer provide in practice its 5 year trend disclosure, one of them should. If 5 year period is appropriate, there is no way we would eliminate this disclosure. Reduction of instruction 2 can improve the quality and attractiveness of this item (301)

71 No, we should not revise item 301 to provide a similar accommodation for EGC and SRC because of lack of reliable information and rapid growth

72 No, we should not require item 301 under these circumstances73 No, we should focus on making current disclosure desirable and attractive to investors when they are making

informed voting and investment decision74 Sophisticated investors are more likely to value item 30175 With the right automatic system, providing this data will not require too much efforts76 Instruction 2 does not provide the needed disclosure. We should modify this item to include a flexible

approach focusing on voluntary disclosure while providing the reason for choosing each item for disclosure.77 We don’t need a preferability letter signed by any auditor not because it will increase disclosure costs but

also it will be a voluntary disclosure with some limitations78 Listing of specific items of disclosure on instruction 2 impacts the way the registrant will provide its

disclosure. It shows that they are all required as a checklist. It must address its disclosure to all of these items with a prescriptive approach.

79 We should retain 302 (a) while removing 302 (a)(1)80 It is important to the investing public beside item (302)(a(1), the rest is not that duplicative it is why it should

not be classified in the removal list.81 Investors still need information about pattern of corporate activities with trend over registrant segments82 I object to the auditor involvement and its preferability letters or review will increase the costs of disclosure83 Investors use some of the items 302 (a) disclosure84 Sophisticated investors value more this kind of disclosure (item 302(a))85 Item 302 disclosure increases costs of disclosure but it helps investors assess its segments86 The financial costs would decrease with the elimination of item 302 but investors may not be informed


effectively to assess segments performances87 Would investors assess effectively segments without item 302 information, I do not know the answer to that

question88 All item 303 requirements are important to the investing public. It is why MD&A is the nucleus of the full

disclosure (10-K, 10-Q). You cannot be more informed about 10-K or 10-Q if you did not read and understand the discussion and analysis of the MD&A. It is why MD&A is the number one frequently comments part of the disclosure (44%). We can improve the quality, desirability and utility of MD&A by limiting aggressive language style and making sure that registrants follow a prescriptive checklist style disclosure.

89 The current disclosure focus on registrant financial condition and results of operation. Materiality standard is working. It is why I believe the adoption of other methods including thresholds (been there) will reduce the flexibility the registrant has now in writing its analysis from the eye of its management

90 Yes, we should consolidate all the guidance related to MD&A as a workshop for writers, management and regulators. This workshop will be a facilitator and you must remember that MD&A is presumed to be written by management of the registrant. It does not matter who is the ghostwriter

91 I believe it will be better to revise rules to require an executive level overview. It will be good for the registrant to follow a checklist with a certain preset sizes for voluntary disclosure

92 Like I did say, the checklist can help to reduce duplicative disclosure93 If we want investors to get a meaningful analysis in MD&A a combination of elimination of aggressive

language style, prescriptive checklist oriented disclosure and prescriptive sizes for voluntary disclosure can help

94 Both sophisticated investors and reasonable investors are taking times to read MD&A. When it is too quantitative, sophisticated investors are more likely to value that part

95 I do not know if tagged format will be better96 A MD&A is a legal document written by the management of the registrant, once auditor gets involved in this

part of the disclosure it will not only increase the cost of the disclosures but also shift or share liability97 Item 303 is expensive and it comes with non-financial and financial costs. I believe the reputation of the

whole discussion is jeopardized if the management analysis can conflict with the other parts of the discussion creating challenges to the full disclosure.

98 Item 303 helps management tell its story of its company financial health and operation. This is the test for the management about fairness and transparency

99 The two step test for disclosure of a known trend, demand, commitment, event or uncertainty will require a material test to result in the most meaningful forward looking disclosure. The event is ‘reasonable likely’ to occur when there is the chance of the future event occurring is more than remote but less than likely

100 Yes, we should revise the two step test to consider requiring a disclosure when a trend, event or uncertainty is more likely than not probable or reasonably possible to occur rather than ‘reasonably likely’ to occur

101 We should revise item 303 to incorporate the probability/magnitude standard from ‘Basic v. Levinson’, it will turnout like disclosure when a trend, event or uncertainty is more likely than not, probable or reasonably possible to occur or with two part test

102 It will make sense to revise item 303 to specifically require registrant to the extent practicable, to quantify the material effects of known trends and uncertainties as well as the factors that contributed to those known trends and uncertainties. By doing so, registrant will share tools it did use in its analysis, it is probable that some readers will not share the registrant’s conclusion but transparency will prevail because it provides an understanding of the management’s analysis

103 No, I believe that we should revise item 303 to include a prescriptive checklist registrant will use in their disclosure

104 Yes, we should be required to disclose any commentary, analysis, performance indicators or business drivers related to a registrant’s key indicators. I believe prescriptive checklist coupled with prescriptive size for


voluntary disclosure will be more appropriate.105 Reasonable investors will value more industry specific key performance indicators106 Management is well positioned when it comes to the identification of standardized performance metric

across an industry107 We should retain a period by period comparison provided in the MD&A in order to show changes from

previous periods108 Additional disclosures about registrant’s results of operations are warranted. For instance, social media can

provide factors they use to determine that one user does not have several accounts and hits109 As far as I am concerned, the 3 years comparison is material information to the investing public. It is why

there is no need for change. When it comes to comparison, the highest the number of years the better readers and investors will understand this trend

110 We can allow registrant’s cross reference the earliest of the 2 periods111 Year to year comparison makes it easy to understand the trend and performance of the registrant; it is why

registrants rely on this method. They are formats or presentations that could result in a discussion and analysis of the material information necessary to understand the registrant’s prospects for the future. It is better for a registrant to provide the year to year comparison in a standardized tabular format.

112 Item 303(a)(3) does not provide useful information about registrants that have not yet generated revenue or begun operations.

113 A separate disclosure will provide a clear picture of the liquidity, capital resources and prospects of the future

114 Registrants must be required to provide a separate disclosure of the liquidity and its capital resources. Doing so will encourage registrant to disclose if it tracks any known trends, demands, events, commitment or uncertainties developing that is causing a material impact on future liquidity

115 It is net cash provided by operating activities, net cash used for investing activities and net cash provided by financing activities. Defining the term ‘capital resource’ will be helpful for registrants. No all registrants currently interpret the term ‘capital resources’ including funds committed from material capital expenditures and the sources of those funds.

116 I do not think so117 Fiscal year and interim periods, I believe these periods are enough. Developments in the most recent fiscal

year is not sufficient to constitute a trend as the term is used in item 303118 A sensitive analysis in the discussion analysis of liquidity and capital resources can be required for the fiscal

year period119 Registrants can provide additional measures of intra period liquidity with average quarterly liquidity or other

measures charts120 Registrant must be required to provide liquidity risk management policies and more

121 Disclosure about registrants reliance on short term borrowing is not clarify by item 303, registrants must describe all the sources of its short (long) term funding (borrowing).

122 Yes, short term borrowing disclosure 2010 proposal should be revisited. It will result in additional disclosure, quantitatively and qualitatively of the short term borrowing

123 SEC should consider different disclosure requirements for financial institutions versus non-financial institutions

124 Tabular representation, charting or graphical representation of the short term borrowing disclosure can increase the quality, desirability and attractiveness of this disclosure

125 Item 303 (a)(4) is important to investors126 SEC should retain it the way it is. Yes, SEC should also revise its rules to require registrants to analyze the

risks and financial potential associated with off balance sheet arrangements127 The location of this disclosure is not important, it can stay where it is but they are a lot of challenges


associated with auditing this information128 It will be very costly to completely eliminating item 303(a)(3)129 Registrant can provide disclosure about matters that will result in or is reasonably likely to result in the

termination or material reduction in the availability of material off balance sheet arrangements to the registrants and the course of action the registrant has taken or proposes to take to address such circumstances

130 SEC should not require additional disclosure of off balance sheet arrangements that occurred during a reporting period with exhibit

131 The table of contractual obligation provides meaningful information to its investors. There is not enough room for improvement to this table.

132 SEC should require narrative disclosure to accompany the tabular disclosure including discussing how registrant plans to meet current and future obligation

133 It does not matter the locations, comparability among registrants is still the goal of investor in making an informed investment and voting decision and registrant needs to evaluate its own performance in the peer competition. A narrative disclosure can add quality, desirability and attractiveness to the disclosure and improve readers ability to understand the disclosure

134 SEC should not enhance item 303(a)(5) by including other categories of contractual obligation to the 5 required categories

135 Footnote disclosure can provide additional guidance such as interest payment, repurchase agreements or tax liabilities

136 I do not believe that revisiting item 303 (a)(5) to require registrant to separate amounts in the table of contractual obligation into those that are reflected on the balance sheet will add quality, desirability and attractiveness to the disclosure

137 Yes, SEC should revise item 303 to require disclosure about critical accounting estimates because this information is important to its investors

138 SEC can use 2003 MD&A interpretive release to define ‘critical accounting estimate’139 Registrants repeat the discussion of accounting policies presented in the notes to the financial statement

because of lack of prescriptive checklists guidance. It will help them to avoid this repetition140 2003 MD&A interpretive Release definition of critical accounting estimates is important to the investing

public. If it is incorporated into Reg S-K it will be better141 For competitive reason, SEC should adopt presumptive requirements relating to critical accounting

estimates. SEC can design and adopt a prescriptive requirements relating to critical accounting estimates after revisiting current issues and rule making projects 2001. They are accounting estimates common to a particular industry that are critical to all participants in that industry (estimate on price per share of the current periods )

142 SEC should require the disclosure of management’s judgment (how did they assess materiality) and estimates that form the basis for MD&A disclosure

143 SEC should require management to disclose the nature of its assessments of errors that it determined to be material

144 SEC should require disclosure of other critical accounting estimates such as those that impact other metrics or measures (number of new customers, number of subscribers, etc)INFORMATION FOR INVESTMENT AND VOTING DECISIONS-RISK AND RISK MANAGEMENT

145 SEC should revise its rules to require that risk factor be accompanied by specified discussion of how the registrant is addressing the risk

146 Registrant can discuss the effect on performance for risk factor if it’s material. SEC can ask registrant to discuss the extent of risk and its potential impact on future financial condition and operating results, disclose the anticipated risks and their potential impact on financial condition and results of operation, describe the quantitative and qualitative magnitude of those risks including potential costs, disclose if the registrant


recognizes any risks factors with material effect, describe the adequacy of preventive action taken to reduce these risks in the future, describe the costs for remediation, protection and litigation as well investigations, describe how the registrant addresses each of those risks and other related and contingency consequences, describe the risks and their impacts on future declines, disclose any risk management strategies put in place by registrant and any limitations on their effectiveness, describe the methods and quantified parameters used to monitor and control risk management activities

147 SEC can modify its rules to require registrants to disclose the specific facts and circumstances that make a given risk material to the registrants. With a guidance of prescriptive checklists, registrant will be as transparent as possible about these risk factors. But, SEC should not require registrant to either rate or prioritize these risk factors

148 Vagueness can increase the opacity of the information from a registrant’s risk factors. It is not about the length of the information, it is about its quality. If it is clear, it will be desirable and attractive to the investing public and understood by them.

149 I believe that it is not possible for the SEC to revise its rules to discourage registrant from providing risk factor disclosure that is not specific to the registrant but instead describe risks that are common to an industry. Some generic risks factors are important to investors

150 SEC can specify generic risks that registrants are not required to disclose them if they can identify them. Another way is to try to develop a list of material risks if possible

151 Once the SEC develops that list if material risks, they will become a part of the new list. That said the new list will be more clear, attractive and prescriptive.

152 No, SEC should not require the registrant to identify and disclose in order its 10 most significant risk factors because it will require more efforts (cost) and no real ROI. Will it require more expertise and experts in rating risk factors or face SEC comments letters and day in court? May be. The goal of this process is to make sure that registrant is managing its risk properly. That said ranking and rating of risk factors can affect the way registrant prioritizes its risk management. Registrants can provide risk factors summary because this information will help an average investor in understanding these risks in a few words easy to digest. It is not that challenging if the registrant is truly managing these risks that means identify them first.

153 A little guidance (checklist or not) can help154 If we could prevent all the risks, we will not spend all the money, time and energy related to risk

management. I doubt that we can create a different process that means one entity starts experiencing problems then others control and prevent them from reaching or damaging their companies. I believe any revision of item 503c will not improve the quality of that process

155 Sophisticated investors are more likely to value item 503c156 Providing the current item 503c information to the investing public is not too expensive. As we know the

cost will change for the worse to provide an enhanced disclosure with limited benefits from it. We must balance this process in order to focus on increasing its quality, desirability and attractiveness therefore disclosure effectiveness

157 Yes, item 305 is important to investors158 Item 305’s information helps its investors to assess the registrant’s aggregate market risk exposure. I do not

believe that it does effectively help investors to assess the impact of market risk sensitive instruments on the registrant’s results of operations and financial condition

159 Disclosure alternative on item 305 (a) somehow help registrant with qualitative disclosure about market risk. These rules do not discourage registrant from evaluating and disclosing their market risk. It will be helpful if the rules were more prescriptive

160 There is a need for a revision in the market risk disclosure requirements to include additional disclosure about risks.

161 Financial institutions, financial services and other systemically important financial institution designated institutions should provide an enhanced disclosure about market risk because they manage other people


money and they are very important to the economy162 Sophisticated investors are more likely to value the information required by item 305163 The cost of providing item 305 disclosure that means tracking, collecting, assessing, reviewing and

disseminating this disclosure is huge because it does not tolerate mistake in an uncertain future. The costs will increase with demand for enhanced disclosure. Unfortunately, I cannot quantify these costs.

164 Since the Clintons era, the world of complex structured financial transaction have witnessed the births of numerous research papers and findings related to the understanding of evaluation, monitoring and management of its market risk. We have moral, intellectual and professional obligations to review, assess and select the best of the intellectual properties and adjust the rules to this new reality. I cannot say what will fit as alternative disclosures, but the rest will be decided by the review team in the best interest of investors

165 It depends of the sizes and products of the registrants166 No, for commonality reasons, we don’t need a management oriented approach because all of the registrants

will provide different and confusing disclosure to their investors, it is why we must make sure that we couple this rule to prescriptive requirements

167 No, item 305 is not repetitive to Rule 4-08 of Reg S-X. The Rule 4-08 requires that disclosure regarding accounting policies shall include description of the accounting used for derivatives financial instruments and derivative commodity instruments and the method of applying those policies that materially affect the determination of financial position, cash flows or results of operations while item 305 rule generally requires disclosures of quantitative and qualitative market risk measurements of financial instruments held and issued by large public companies. It does not mean the policies aspect only, item 305 is not found in full elsewhere in the registrant filing. Investors benefit from disclosure about market risk exposure outside of the audited financial statements.

168 The problem is not that the rules allow standardized optional methods of disclosure; the true problem is that the rule does not provide procedures specifying how to comply with each alternative. Curing this malpractice will result in comparability in the disclosure across registrants adopting specified method. A look of the CDI Market Risk Disclosure, dated July 31, 1997 provide some guidance about key assumption necessary for the understanding of the tabular presentation (Q and A 43), sensitivity analysis (Q and A 50) and value at risk disclosures (Q and A 60)

169 SEC can revise the rules to require registrants to describe their risk management process. It will make sense to require registrants mostly those with no or insignificant risk to disclose how they prevent, monitor and evaluate risks

170 Once again, I believe that it will make sense to require registrants to describe their assessment of any risk management process they elect. After years of targeted review of these disclosure, SEC will probably come up with better guidance (specific to the industry or global)

171 Registrants with complex risk management approaches or processes should have an ERM (Enterprise risk Management) policies in place, describing it will be appropriate and material information to its investors and the investing public

172 Registrants should also disclose any material change or waiver of risk management approach173 Registrants should identify for their investors material primary risk exposures not already addressed and

disclosed to them any actions taken to manage those risks174 The best way to help investors understand integrated discussion of risk mitigation will start with risk

exposure and then mitigation (interest risk, risk exposure, monitory, preventive control, detective control, reputational risk, foreign exchange risk, franchise risk, equity risk, custodian risk, regulatory risk if applicable, transfer of risk and control, identify risk, describe its management, describe how it minimize risk and potential impact, describe the role of the BoD, segregation of duties). Management should also disclose their views about the material risk exposure and how risk mitigation actions are connected

175 Like I said SEC should revise its rules to insert the disclosure about the extent of a BoD’s oversight of risk


from item 407(h) or something close to item 407(h). But, there is no material reason to provide any compensation risk disclosure to handicap CDA.

176 Item 305(b)(1)(ii) states that “how those exposures are managed. Such descriptions shall include, but not limited to, a discussion of the objectives, general strategies, and instruments, if any, used to manage those exposures;”, I believe that SEC can require registrants to provide this type of disclosure in lieu of disclosure of their efforts to manage or mitigate each risk factor. The disclosure of strategies can pose competitive harm to the registrant if it’s executed improperly

177 Too much information about risk mitigation will not help investors to understand the significance of risk especially when it is provided in a boilerplate language. It is possible that requiring registrants to explain how it addresses a disclosed risk can reduce number of generic or insignificant risks disclosures.

178 Again, SEC can require registrants to address mitigation or management of each risk factor as part of the risk management discussion while allowing across industry reference to the appropriate portions of MD&A or financial statement

179 Yes, SEC should require registrants to disclose their known uncertainties about their risk management and risk management policies and their impact on the registrant financial condition, results of operations and future prospects

180 SEC should consider a drastic change with a revision of rules to create an item focusing on providing a consolidated discussion of risk and risk management including legal proceeding in a single filing. That means a consolidation of items 1A, 3, 7A and other risk related disclosures

181 The benefits for investors are that they will have all risks in one item, readers will not need to furnish more efforts to search a lot of locations to understand all the risks. It will be like CDA-Compensation discussion and analysis. The challenge is that it may turn out to be too long to ‘digest’

182 The cost of building a comprehensive consolidated discussion of risk is related to new ideas (new format, new learning) ; the breaking even will be when SEC will start issuing comment letters about this disclosure. I believe that sophisticated investors will approve this idea and will not hold 1st timers accountable to their mistakes. It will be like wait and see in the investing publicINFORMATION FOR INVESTMENT AND VOTING DECISIONS-SECURITIES OF THE REGISTRANT

183 SEC should retain item 201(b)(1)184 What truly matter for the investing public is not the street name and beneficial owner but the person who is

making the investment and voting decision. It will not make sense to provide street name number when beneficial owners are making all the investment and voting decisions behind closed doors. The utilization of this data by the investment public determines what is in the best interest of the investment public. This information was supposed to communicate something to its readers that thing may be the number of decision makers. Requiring registrants to provide the numbers of beneficiary owners will be clearly too difficult to obtain because of the binding contractual agreements. In addition it will not provide the target benefit. I believe that the registrant must disclose the number of beneficiary owners that means investors who make acquisition of shares themselves with physical certificate or through DRS (direct registration system) and also the number of street name owners. Once investors empowers someone else to make investment and voting decision, the disclosure of empowered investors number will add more quality to the disclosure.

185 Both sophisticated investors and average reasonable investors will find this information useful but it is still confusing

186 The information about terms and condition are furnished to potential investors in the secondary market. The article of incorporation and Bylaws are very important information investors should read and rely on. I am not sure that they prefer the one filed as exhibit or the other posted on line (company website). But they should rely on the one filed as exhibit to the registration Form 10-K because it is supposed to be reviewed

187 SEC should require registrants to provide item 202 disclosure each year in form 10-K. Investors need it more around that time not just to make investment decision but also to make voting decision. All material changes


should be disclosed in their quarterly and annual reports. This information helps investors understand the registrant P/E ratio and its dividend (payout, retained,…). Form 8-K is serving its purpose sufficiently with this information.

188 Average reasonable investors value more this information189 This information is one of the cheapest information for the registrant. It does require no effort with actual

technology system190 The benefits of providing this disclosure are not huge but it does help investors understand how

management and BoD manage the registrant equity191 SEC should retain item 701 (a)-(e), I believe that the past 3 years trend of all sales of unregistered securities is

a good information to the investing public about the registrant private placement192 Item 3.02 focuses on sale of equity securities in transaction that is not registered under the Securities Act.

And, the amount of the equity securities sold in the company’s last report filed under this item or last periodic report whichever is more recent constitutes more than 1% of the company’s outstanding securities of that class. Grants of stock option pursuant to an employee stock option plan are excluded from this disclosure. While item 701 disclosure focuses on all sales of unregistered securities sold by the registrant within the past three years. In addition, I do not know the appropriate thresholds here. But it is not just a matter of threshold; it is also about aggregate quarterly and annually.

193 It will make sense to revise the rule to require disclosure of all unregistered sales of securities during the reporting period. Simply requiring a cross reference to form 8-K will create problem because of its threshold. I am afraid that we have to inform investors about 1 percent or less of the number of shares outstanding of the equity securities being sold

194 SEC should not remove the item 701. At the same token, we cannot require registrant to file form 8-K every time they will sell a small amount of shares; we should keep it the way things are. We cannot afford to eliminate item 3.02, it is a good information about the registrant’s private placement

195 When it comes to changing of locations, I want to read their arguments because it will add a lot of pages to item 7, something I have some reservation to do

196 I do not believe they are a lot of challenges to comply with this item requirements197 I will discontinue item 701 f disclosure, SEC should revise item 701f to add beauty and attractiveness to it198 If the actual use of proceeds differs materially from the description of the offering and come from offering

transactions, we must relocate that past disclosure in the MD&A may be199 Item 703 is very important to investors. It must be rooms for enhancement of the repurchase disclosure.200 SEC should require an enhanced disclosure of repurchase of a registrant equity to discuss its impact on

leverage, EPS,…201 Item 703 provides a good discussion about repurchase score. The benefits for investors is to assess the

repurchase program and understand it if it is in the best interest of the CEO, attractiveness to rating analysts or shareholder value maximization

202 Disclosure of all repurchases of securities during registrants fiscal quarter is very important to investors who rely on EPS to make investment decision. There is no reason to disclose a non-material program so the SEC can set some threshold triggering a material disclosure

203 Item 703 quarterly report requirement is appropriate204 I do not believe average reasonable investor needs repurchase information promptly but if SEC decides to

require repurchase on Form 8-K, it has to focus on high threshold in order to reduce the cost of disclosure for the registrant and increase materiality of the disclosure that means attractiveness of the disclosure.INFORMATION FOR INVESTMENT DECISIONS-INDUSTRY GUIDES, SUSTAINABILITY MATTERS AND EXHIBITS

205 No, all registrations should disclose under Reg S-K, S-X, S-T to enforce uniformity in compliance therefore comparability among registrants

206 It depends on industry, some registrant find the industry guides useful in preparing disclosure for periodic reports


207 The challenges of providing industry guides disclosure are the lack of uniformity in compliance and comparability across an industry

208 I do not think codification will solve the problem. If codification can bring consistency to industry guides. It will add quality making them compete against Reg S-K, S-X…. At the end, it will have a lot of challenges overcoming obsolete

209 All industry guides should be updated. Other industry guides should be developed like healthcare services, entertainment-casinos-hospitality, entertainment-films, entertainment-music (media, broadcasting), defense contractors, airline, research & development, financial institutions, regulated industries (electricity, water,…). All of them will benefit from such guidance. That means industry specific disclosure under Reg S-X will be better for all of them if SEC can develop them

210 It should be expensive to disclose under industry guides because it can conflict with Reg S-K and create disagreement in interpretation. A new guidance may be needed because it will restore uniformity in compliance, comparability across an industry therefore less confusion

211 I can work without industry guides as long as I can assess SEC comment letters, CDI, NOL, waivers,… I can develop any policy because I have a lot of data guiding my work

212 It does create a lot of confusion. As a policy staff, it does undermine the commission rules. That is sad, if there is a conflict

213 It will be more useful to consolidate all industry specialized disclosures located elsewhere to Reg S-K if they do not conflict with Reg S-K that means they will add quality and attractiveness to Reg S-K requirements. They can be identified based on their names. It is possible that CDI or SAB have addressed these issues before hand in their Q and A

214 Industry specific disclosure requirements should apply to every registrant in a particular industry but we can also add some qualitative and quantitative thresholds to distinguish them

215 Sophisticated investors are more likely to value industry guides disclosure216 There are specific sustainability and public policy issues important to make an informed voting and

investment decision including climate changes, environment issues, all sustainability report, corporate campaign contribution, carbon emission, water scarcity and human right. If the real issue is to add quality and attractiveness to the information in order to help investors rely on the report to make an informed investment and voting decision, we should not worry about changing 2010 interpretative guidance because the only information improving the understanding of the disclosure is environmental costs (litigation awards, penalties and fines)

217 Although sustainability requirements line item (customer health and well-being, pollution of air, market pressure, community health and well-being and more) can lead to information overload and expensive costs of the report for fear for prosecution, penalties and reputational costs. This kind of disclosure will camouflage material information. Investors would have hard time reading the whole report and understanding what is material in that disclosure

218 The sustainability report on citizenship webpage or the like is too voluminous, it reports from acquisition of green vehicles to installation of green bathroom. It is mostly for PR to the green activists, keeping them from joining the street manifestations with hedge funds activists. Integrated report will add quality, consistency and comparability but will reduce the amount of information to be provided to the investing public.

219 I do not understand why the SEC will add line- item requirements. I believe SEC should review the sustainability framework and fix it without line-item requirements

220 I do not believe there are sustainability issues for which line item disclosures requirements would be consistent with the rule

221 The challenge is a lack of data as new projects it will require a new budget with no direct impact on the company bottom line improvement. They increase regulatory burden, they increase operating costs, they can reduce focus on important long term strategy for the company and 68% of companies believe that sustainability related actions and decisions do not add profit to their bottom line. But at the same time, they


can provide incentive to innovate and pay attention to very important social, environment and economic issues.

222 I believe there is no need for line item disclosure requirements if you insist that some companies will deserve some waivers, and scaled disclosure requirements

223 Experts in this field are too difficult to satisfy. There is nothing wrong to the 2/2/2010 US SEC commission interpretative guidance. It is a good reference. What SEC can do is to revise it and add some quantitative and qualitative thresholds for materiality. I believe it was not discussed properly.

224 SEC should eliminate and modify some exhibits requirements in item 601, exhibit 3(a) Article of Incorporation, it is on line and should be required to be on line unless any material changes to it, exhibit 3(b), exhibit 14, exhibit 95 can be provided on Form 10-K and hyperlink on Form 10-Q unless there is any material changes to it. Let take the risk to eliminate exhibit 100

225 Exhibit 3(a) Article of Incorporation should be required on line posting and exhibit 95 can be provided on Form 10-K and hyperlink on Form 10-Q unless there is any material changes to it

226 There is no problem on the usefulness of these exhibits. They can be found easily at the end of the report227 Sophisticated investors are likely to value most of these exhibits228 It is expensive because we have a lot of documents to provide here, extensive business related language,…229 We should continue to allow registrants to omit schedules and attachment for exhibits filed under item 601

(b)(2). It should be some quantitative thresholds applied to this omission and exemption230 Immaterial schedules are useless and a waste of time in any reports. SEC should develop guidelines with

quantitative thresholds and qualitative factors on how registrants could evaluate materially purposes including schedules and attachments. The benefit is that it will reduce immaterial schedules. The challenge is to design reliable guidance. SEC should require registrants to disclose how they assessed materiality for purposes of omission of schedules and attachments

231 SEC should require registrants to include with such exhibits a list briefly identifying the contents of all omitted schedules

232 Requesting a confidential treatment is a long process it is why SEC believes that it makes sense. SEC should allow registrants to omit personally identifiable information (PII) without making any formal request for confidential treatment SEC should limit this accommodation to information contained in schedules and attachments to exhibits.

233 We should revise item 601(a)(4) to exclude immaterial amendments. SEC should develop guidelines related to materiality regarding amendment to be required to.

234 SEC should require registrants to identify changes in the amended and restated contracts such as by underlining or highlighting the changes. This requirement is not difficult to comply with.

235 No, there is nothing wrong with instruction 1236 Yes, instruction 1 is a true guideline for all filings to deal with materiality. SEC does not need to expand

clauses (A) and (B) of instruction1.237 No we cannot eliminate this limitation ‘any incomplete exhibit may not be incorporated by reference in any

subsequent filing’238 SEC can revise item 601(b)(10(ii) to include quantitative thresholds or issue a CDI. It will help to discourage

immaterial contract filing. That said, the information will become more useful to the investors239 SEC can issue a CDI to define the types of contracts not made in the ordinary course of business that

registrants are required to file as exhibits240 These contracts are important to investors because they help investors understand the results of operations

including past or future, IBNR, AR or/and cash flow. No, SEC should not limit subparagraph (ii) to newly reporting registrants. No, SEC should not eliminate subparagraph (ii) and require registrants to file only material contracts that are to be performed in whole or in part or after the filing of the report. As long as the contracts remain material to inform investors about the registrants’ results of operations and financial conditions, it must be filed with that exhibit. Under incurred but not reported, the contract remain material


information for the registrant’s investors241 Yes, SEC should expand the types of contract under item 601(b)(10)(ii)242 SEC can revise item 601(b)(10)(ii) to include categories of contracts. SEC can use relevant time frame (about

a fiscal year), percentage threshold and top management/directors involvement. The benefit is that it will focus on material contract and the challenge is to properly comply with the rule

243 The information on contract filed under item 601(b)(10)(ii) is very important to the investing public. It depends to the materiality of the different types of contract

244 Immaterial in amount is very necessary standard by which to determine when a contract needs to be filed. Registrants must test this standard for inclusion or exclusion. In my view, if a contract is material in amount, it is significant. It will make sense to revise item 601(b)(10)(ii) to exclude only contracts that are immaterial to amount and significance. Yes, it will facilitate compliance if SEC can revise item 601(b)(10)(ii) to state in the affirmative that registrants must file all material contracts made in the ordinary course of business that fall within one or more categories listed below…

245 Yes, it just means that related party involved and the amount is over $120,000, the contract must be filed therefore this information is useful to investors. It will make sense to revise item 601(b)(10(ii) to include related party transaction under item 404(a). The benefit is that it will limit kickback. Challenge is that it fails to address the aggregated nature of these contracts, all of them can come from several related parties

246 SEC can attempt to consolidate item 601(b)(10)(i) and 601(b)(10)(ii) to require all contracts that are material to an understanding of the registrant financial condition and results of operations to be filed. All the contracts will be captured with this requirement. This information does enhance investors understanding of the registrant financial condition and results of operations. The challenge is that sophisticated investors will start micromanage the company. The benefit is that it does provide clarity and consistency to the registrants in their effort to comply while being transparency to investors

247 SEC should consolidate all qualitative and quantitative thresholds for determining when contracts identified in item 601(b)(10)(ii) and adopt it

248 SEC can revise item 601(b)(10)(ii)(B) to define ‘substantial dependence’. SEC should look at ‘related parties’ and ‘contingency’ in order to define ‘substantial dependence’.

249 Quantitative thresholds will be based on the size of the registrant market capitalization or total assets. Quantitative thresholds will bring consistency and clarity to the disclosure while reducing immaterial disclosure. It will be good to tie quantitative thresholds to market capitalization or total assets

250 It will add clarity to the registrant effort to comply if SEC defines ‘depends to a material extent’. It is not necessary to make distinction between franchise, license agreements and the like.

251 I prefer when quantitative thresholds are based on total assets instead of fixed assets (see Dot.com), that means revising item 601(b)(10)(ii)(C) to fix it to 10% of total assets thresholds. I would not eliminate a prescriptive threshold for principle based requirements.

252 Item 601(b)((10)(ii)(C) should no longer focus on fixed assets. SEC should expand this item to include IP (intellectual property), patent licenses,… Yes, a little ‘clin d’oeil’ to item 2.01 of form 8-K will be appropriated because 10% of total assets makes sense.

253 The information provides by registrant in their auditor’s preferability letter is meaningless. If SEC could develop some kinds of quantitative and qualitative thresholds triggering any changes it would have been helpful

254 There is no particular language adding clarity, consistency and quality to the preferability letter. Rarely, there is any real reason for changes other than to improve the registrant’s bottom line. It does not depend on the nature of the change

255 SEC should revise item 601(b)(18). The same auditor can only issue an unqualified opinion to the disclosure while reading his preferability letter. The elimination of this exhibit will create a lot of changes without any suspicion of fraud from the investing public

256 It is not appropriate to make any indication but the investing public (sophisticated investors) will suspect


these changes including their timing and the improvement they bring to the bottom line, leverage, rating,…257 SEC should revise item 601(b)(21) to require registrants to disclose all subsidiaries. The benefit is that it will

keep the registrant from hiding some small subsidiaries with high aggregated value258 No, SEC should not expand the exhibit requirement to include additional disclosure about the registrant’s

subsidiaries259 Yes, SEC should require registrants to include an organization chart or corporate structure chart or similar

graphic depicting their subsidiaries and their basis of control. This chart can help investors understand where the registrant result of operations and financial conditions are coming from. SEC should require an organizational chart as exhibit of the annual report. There is no challenge to design this chart

260 This definition of ‘significant subsidiaries’ excludes ‘insignificant subsidiaries’. This disclosure should not exclude any subsidiary at all

261 SEC should require registrants to disclose their LEI (Legal Entity Identifier) and the LEI of their subsidiaries on the list of subsidiaries filed under item 601(b)(21). The benefit is that investors will know the existence of the reference code to uniquely identify a legally distinct entity that engages in a financial transaction. As you know the commission prescribes disclosure of an obligor LEI with respect to a rating action involving a credit rating of an obligor as an entity so it does have effect. As of December 2015, the cost of obtaining an LEI from Global Masters Entity Identifier (GMEI) utility in the US was $200 plus a $19 per record surcharge for the LEI Central Operating Unit.

262 At this time, I do not see any reason to require LEI, may be financial services registrants may need it but SEC needs to perform more research on this utilization before making a definitive decision on the LEI requirement

263 SEC should make a good research study before to require it to large accelerated filers or well- known seasoned issuers (WKSI)INFORMATION FOR INVESTMENT AND VOTING DECISIONS- SCALED REQUIREMENTS

264 Yes, failure to timely file 10-K and 10-Q could result in the disqualification for using the scaled disclosure. The time period is a year to cure this exclusion and regain this qualification

265 Actually public float criteria is the only criteria keeping public companies from inflating employee at will compensation package on paper

266 Scaled disclosure requirements are not called to help some larger companies, if SEC wants to reduce larger companies compliance costs, they will reduce all of them their compliance and administrative costs.

267 Asymmetric information between investors and managers of new companies are the highest because there is not historical data of the companies. This sometimes has nothing to do with the size of the companies.

268 Yes, there are disclosure requirements for which scaling is not appropriate269 If an average investor needs a lot of information about the company in order to make an informed

investment and voting decisions.270 MD&A is very important for the SRC because of the discussion about revenues, liquidity and others. Market

price is not that necessary for SRC, the more data the market has about the company the more reliable the value it assigns to the company. When it comes to SRC, it is possible that there is not enough data to rely on. Asymmetric information balances in favor of the manager. That means sometimes the market undervalues the company because of its scaled disclosure. But, the company can reduce compliance and administrative costs because of scaled disclosures

271 SEC should consider scaling item 701 for the SRC. Item 404 needs to be visited to restore related party disclosure. SRC and its managers deal too much and questionably with their related party

272 EGC can take advantage of the scaled disclosure requirements currently available to SRC for elimination of backlog disclosure but we cannot eliminate tabular representation of contractual obligation, MD&A

273 No, this reorganization and separation of Reg S-K related to SRC will not provide new tool to the registrant and investor helping them to understand better the rules or/and disclosure or to make investment and voting decision


274 Definitely, we should not add unnecessary expensive data and pages nobody uses or will use275 Based on good definition of materiality, all immaterial information should not be disclosed276 Sophisticated investors will be more affected by further scaling because they prefer a lot of data about the

company in order to make an informed investment and voting decision277 A good scaled disclosure’s costs and benefits analysis will indicate that SEC scaled disclosure reduce

compliance costs to the registrants. Scaling additional items requirements will reduce compliance costs to the registrant but with less information to the investing public, the market will undervalue the registrant. Like the 3rd world company, it is possible that the registrant shareholder value will not be maximized. Can they disclose it more voluntarily?

278 Yes, the investing public benefits 10-Q report. Big benefit is that it provides greater confidence and regular up to date information to investors who needs reliance to trade share between terms for wedding, funeral, donation to gifted children,… Quarterly report is here to stay

279 Because of consistency and comparability, the reporting requirement should be the same for all types of registrants. These quarterly reporting requirements should NOT exclude SRC

280 No, all categories of registrants should file quarterly financial report, I will find out the exception given to financial service companies

281 Filing a monthly report will be too expensive in term of compliance and administrative costs to any type of registrants

282 May be the 1st quarter needs some kind of scaled or abbreviated disclosure because of the Sch 14A report using some data of the 1st quarter. SEC should eliminate the requirement of information provided by Pre and Def 14A,… SRC should comply with scaled disclosure.

283 Quarterly reporting obligation plays a big role in the strategic goal and management of the registrant. I do not believe that quarterly reporting obligation hurts long term decision making of the registrant because its information helps the registrant to assess and monitor its long term projects

284 Both sophisticated investors and reasonable investors will value more 10-Q report as a very good tool for investment and voting decisionPRESENTATION AND DELIVERY OF IMPORTANT INFORMATION

285 I believe in the quarter report as good asset to preserve for regular valuation of companies, its projects and future plans. If we lose this tool, it will increase low confidence in the market valuation and asymmetric of information; it will reduce this frequent evaluation tool of the management and registrant performance and interest in the registrant’s management. For management, it is very necessary to know what your investors think about your management style and score regularly; do they have to wait for a year? Too long, investors will lose interests in registrants activities

286 Cross reference helps to eliminate repetition because a registrant may provide all the information required by both or many requirements in one location with the second, third etc location simply containing a cross reference back to the first location

287 Item 303 would benefit from greater use of cross references. SEC should revise item 303 to encourage the use of cross references. No, SEC should not amend item 303 to meet the original disclosure objective

288 For readers, the only inconvenient process is to go back and forth searching for the first location where the information is. There is a challenge caused by cross referencing when it comes to comparability among registrants

289 I do not think it is a great idea to provide certain disclosure in the same location in every filing290 The use of cross references can reduce compliance and administrative costs because it does reduce the

number of pages in the disclosure.291 Item 303 would benefit from a cross reference to related or more comprehensive disclosure in different

parts of the filing292 Cross reference does not make a disclosure more readable. It makes it less voluminous. Here you have to

stop and go back to find the indicated location where the information is


293 Item 303, notes to the financial statement, financial statement and more are where cross references do not satisfy the SEC readability because readers find it difficult to locate the indicated information when it is set elsewhere in the report. Financial statement and notes to financial statement are parts of the disclosure where cross references can be prohibited

294 SEC should reconsider rules that seek to provide investors with information in a single location after good assessment of their utilization (strengths and weaknesses)

295 If the purpose is to increase the report readability, I do not see how the use of references will increase consistency in location of information across periods and registrants

296 Previously disclosed information along with recent developments in single self-contained filing can help investor understand the disclosure. If the information has not changed, repeating that information will help investor understands this disclosure. Providing previously disclosed information along with information that is new or has changed will help the readers focus on changes. If the SEC requires registrant highlights changes in their report, it will be problem of readability and completeness that means lazy readers will only focus on changed information without understanding the disclosure as a whole

297 SEC should not change the state of the incorporation by reference. For professional and sophisticated investors/readers, incorporation by reference is a signal for him that this information is a déjà vu for him and he has to allocate less time on it. In short, it helps reader to time their reading very well

298 Item 303 MD&A should remain direct sources of disclosure information rather than permitting the use of incorporation by reference. The incorporated information, 5 years or younger, should be located in the filing made via EDGAR. It does not matter of the sections as long as it was filed via EDGAR.

299 Providing historical and recent information within a single self-contained filing should not be a matter of sizes of the registrants but it can be a matter of disclosing historical data.

300 Yes, because Form 8-A and others forms allow historical incorporation by reference, registrants should present their complete core disclosure. This is the only category I can think of at this time

301 SEC should expand registrants ability to incorporate by reference to exhibits because it will limit the number of exhibits but it will require effort to find the information

302 Flexibility to use incorporation by reference can reduce compliance and administration costs to registrants related to the preparation and dissemination of disclosures because it will not cost them to direct readers to their previous filed documents instead of preparing a new one.

303 If the SEC revise rules to permit registrants to include external hyperlink in their filing to satisfy disclosure obligation it will be problem with the adopted documents and its information. The hyperlinked documents may turn out to be too big and complex to adopt. The document must be printable to satisfy both online and print readers. The whole purpose of this process is to add clarity and simplicity to all readers. If it serves only online readers, FD regulation becomes a new speculation (too selective group). Printout must be available at the time hyperlink will be disclosed and posted on line.

304 The increased use of hyperlinks with frequent access to sites may not add quality and attractiveness to the disclosures. Also, issues will be rise about comparability between online readers and print readers. SEC should require information in a single filing and location

305 It is not necessary to require hyperlinks with any cross reference to specific information. The benefit is that it will give an idea to the reader what it will read after the click but also it violates this process (disclosure effectiveness) because it will be adding immaterial and repetitive information. It will be waste of time and money. Company does not own the information incorporated by reference, it does not matter that information is still on the company website

306 No, SEC should not eliminate the requirements under Rule 12b-23 to attack information incorporated by reference because it adds clarity to the disclosure

307 Registrant can or cannot incorporate by reference from their own website. It will require little change in liability for this information

308 The challenge is that navigability in big company website for the first time, it takes a little more time.


Investors will need just a little more e-skill. Investors who need report in print may need the incorporated document sent to them, it may become too voluminous. It will impact sophisticated investors or 3 rd party who engage in automated processing on EDGAR

309 Investors seeking information from 3rd party sources will need an internet access and knowledge to navigate some websites of the providers. The challenge is to find a reliable and knowledgeable 3 rd party provider information

310 With a good use of search engine, there is not difference but historical documents are difficult to find while navigating company website. Normally, it has to be newly posted

311 Most information on IR (investor relation or investor communication) are filed and posted for compliance reasons. That means every documents incorporated by reference is considered filed and is ruled by 18, 11 and 12. Registrants can incorporate webpages or standalone documents and make sure that management did read that document again and again. The big problem with this type of incorporation by reference is that registrant can correct (update) this document information, if the registrant does, it is a violation, a fraud (PDT documents, do they show update date?) and 18 will apply because this document or webpage was adopted in the filed document. If the registrant goes out of business, the incorporated by reference documents are not saved, after the death, the review will be incomplete (10 years retention may work)

312 With a change in document retention policy (duration) WKSI can be considered in the pilot program (tryout)313 We have to take into consideration a document retention policy (duration) and volume of the web, SEC pilot

program (tryout) can include incorporation by reference of exhibits314 The omission of the required information from filing when the information is provided on the registrant’s

website is possible but the way they write them cannot satisfy the historical review (chronological focus may be, number of employees per quarter, company address,…)

315 For preservation, integrity, accuracy and timeliness, it makes sense to require disclosure of the information in the registrant’s filing that is already available on the registrant website. It depends on the nature of the information, the elimination of disclosure because they are required to be available on the registrant website may not have any impact on the accuracy and transparency of the disclosure if the information is not that information (updated overnight)

316 No, SEC should prohibit incorporation by reference from sources other than a registrant’s filing or its website. I do not believe that incorporation by reference to 3rd party sources is warranted.

317 Sophisticated investors and professional 3rd parties providers may value disclosure made available on registrant websites

318 Permitting registrants to incorporate information from their websites helps registrants in term of volume of the disclosure by consequent compliance and administrative costs (timeliness, effort… )

319 Current disclosure requirements consider the need for both standardized and flexibility in preparation320 A combination of prescriptive and principle based disclosure can enhance the presentation of the disclosure

by registrants321 A prescriptive order and format for presenting information annual or quarterly reports can improve

readability and comparability but it may create a little problem understanding a specialized company. Standardized requirements enhance the ability of investors and 3rd party to use this disclosure because they know what to expect from this disclosure (order, design,…)

322 SEC must come up with some order based on the sizes and industries. During this trial time, I did read financial reports I did not finish because of lack of items numbers…. It is not good when it is disorganized

323 Item numbers and caption add clarity, navigability, consistency, attractiveness and effectiveness to the disclosure

324 SEC should revise item 102 (properties) to require standardized tabular presentation. Its advantages are that it will improve clarity, comparability and navigability to the report

325 Item 1B can be presented in question and answer format. SEC should only permit it, it should not be required, just options to exercise by registrants


326 Item 201 can take the form of check the box presentation. It can also work with item 304. It can add clarity and navigability. The disadvantage is that readers may not read the narrative information

327 Some part of MD&A item 303 needs more flexibility at the same time there is a need for prescriptive order to it

328 Standardized format increases comparability, valuation accuracy, investment efficiency while reducing the cost of acquiring that information

329 Other approaches to layering or layered disclosure beside summary information are taps (organize information by topic may work for item 303)

330 The quality of the structured disclosure can be enhanced by reducing number of errors, missing amounts and calculation, complexity and increasing usability of data

331 The changes to the EDGAR system that SEC should make to render the structured disclosure filed by registrants is not combining or organizing into structured data sets and posted for downloads, it is just to discontinue this program, most important information (management starts presentation with what he/she believes is the most important information) and basic information (segregated based on changes or not changes)

332 Axis tag allows a filer to divide reported elements into different dimensions (revenue by geographical area, fair value measurement levels and components of total equity), it looks somehow useful to sophisticated investors. When disclosure are unique to the company, there is use of combination of standardized and principle oriented disclosure. I do not know how this custom method will be added to the automated analysis

333 May be some item 5, 6, 7A can accommodate structured data but we need to prove usability of data or unnecessary because data must be used by reasonable investor in making voting and investment decision

334 If we consider adding structured data requirements for disclosure in periodic reports, we need a simple level to lower the cost and complexity to registrant and investors of preparing the report, accessing, collecting and analyzing information. Registrants should identify and labels parts of the disclosure to improve readability, clarity and navigability to the reports

335 The availability of structured data in registrants periodic reports affect negatively times to review the disclosure by average reasonable investor. The more armed with quantitative and qualitative data and technologies, the more sophisticated investors will prefer it. It is not for average investor. May be there are other methods of structured data disclosure adding usefulness to the disclosure

336 3rd party data aggregators provide to investors, these data are sometimes good substitute to the one developed through structured disclosure

337 SRC cannot afford it and some do not have enough data to provide scaled disclosure, they should be exempt338 They say having XBRL and other structured data submitted as a simple exhibit, I will add that there is a need

for audited data to add accuracy to this disclosure339 Highly complex companies have too much complex data to increase their utility with tag; they should be

exempt to provide more complex data to their investors340 I am sure that there are other technologies available to incorporate into the disclosure but we need a careful

research, review and trial


Law

Concept release comment