CONCEPT RELEASE: BUSINESS AND FINANCIAL DISCLOSURE REQUIRED BY REGULATION

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

206 It depends on industry, some registrants find the industry Guides useful by 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. That means adding quality and making them compete against Reg S-K, S-X…, 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 con conflict with Reg S-K and create disagreement in interpretation. A new guidance may be needed because it will restore uniformity in compliance and 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 said, 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 quantitative and qualitative 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 informed voting and investment

decision including climate changes, environment issues, all sustainability report, corporate campaign contribution, carbon emission, water scarcity, hum rights and more. If the real issue is to add quality and attractiveness to the information in order to help investors the report and rely on it for 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, fines, remediation,…)

217 Tough 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 streets with hedge funds crowds. 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 project 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% 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, 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 materially 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 I believe that it makes sense. SEC can 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 investors

241 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 because 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 value

258 No, SEC should not expand the exhibit requirement to include additional disclosure about the registrant’s subsidiaries

259 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 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 (GMET) 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)