By Sarah N. Lynch
WASHINGTON (Reuters) – The top U.S. securities regulator unveiled plans on Friday to modernize corporate disclosure rules and make it easier for investors to locate information that is often buried in lengthy public company filings.
Acting Securities and Exchange Commission Chairman Michael Piwowar said the agency’s two commissioners will vote on a raft of non-controversial measures next week, as part of a project to improve how information is disclosed.
“I am very pleased that we have immediate opportunities to seek to provide meaningful disclosure improvements for the forgotten investor,” said Piwowar, who spoke at the annual “SEC Speaks” conference hosted by the Practising Law Institute.
The rules that will be contemplated at a public meeting on March 1 are considered unlikely to generate much controversy.
The normally five-member panel is down to just two commissioners, Piwowar, a Republican, and Kara Stein, a Democrat. If the two cannot agree on whether to advance a rule, then the measure fails.
President Donald Trump’s pick to head the SEC, attorney Jay Clayton, has still not been confirmed by the U.S. Senate, and Trump has not yet named the other two commissioners.
However, Clayton has privately conveyed his intention to improve capital formation in talks with Trump and Trump’s staff, and efforts to modernize disclosures are widely seen as an important step toward that goal.
While Piwowar is limited in what he can accomplish, he also spoke about some bigger-ticket items that he hopes the SEC can do to improve capital formation.
In particular, he called on the SEC to overhaul outdated rules that restrict retail investors who earn less than $200,000 or who have a net worth of less than $1 million from investing their money in private securities deals.
Piwowar said the SEC’s current rules apply “artificial” distinctions between accredited and non-accredited investors that should be re-evaluated.
In the meantime, the SEC will focus on smaller ticket items next week.
One such measure would require public companies to include hyperlinks to exhibits attached to their corporate SEC filings.
The rule aims to make it easier for investors to retrieve documents that, under the current regime, are often difficult to locate.
Other steps the SEC will take include considering whether to update 30-year-old banking industry disclosure guidance and whether to propose requiring companies to use “inline XBRL” formatting.
Companies currently report financial data both in their filings and through exhibits that contain “XBRL,” an open-standard software that labels financial statements with computer-readable tags that can be read like barcodes.
Inline XBRL essentially would embed the XBRL data into the financial statements themselves.
The SEC will also separately consider whether to bolster the kinds of disclosures that municipalities must provide to brokerages that underwrite municipal bonds, Piwowar added.
(Reporting by Sarah N. Lynch; Editing by Meredith Mazzilli and Grant McCool)