LEGALcurrents®

On March 2, 2020, the Securities and Exchange Commission (“SEC”) approved amendments to the financial disclosure rules that apply to registered debt offerings with credit enhancements. The SEC’s stated purpose in adopting the amendments is to improve disclosure quality and to encourage companies to conduct registered debt offerings instead of private debt offerings. These amendments follow the trend of the SEC simplifying disclosure requirements for issuers while continuing to emphasize the importance of investor protection. 

These rules apply to (1) issuers of guaranteed securities; (2) guarantors of guaranteed securities; and (3) affiliates whose securities collateralize the securities being registered. The requirements impact disclosure made in connection with registering the debt securities as well as ongoing periodic reporting.

The amendments eliminate some compliance burdens for issuers, including by allowing summarized financial information, reducing the number of periods presented in financial information, and allowing this information to be presented outside of the financial statement footnotes. The SEC believes this relief for issuers, which is intended to decrease the costs of raising capital, coupled with the protections for investors present in a registered offering, will make registering debt offerings with credit enhancements more attractive to issuers and investors alike.

These amendments, which will comprise a new Article 13 of Regulation S-X, will be effective January 4, 2021. Companies may voluntarily comply with these rules in advance of that date. The SEC’s final rule is available here.

If you have any questions about this LEGALcurrents®, please contact a member of our Securities and Capital Markets practice group or call 716.853.1616 or 585.232.6500.


Attorney Advertising. Prior results do not guarantee a similar outcome. This publication is provided as a service to clients and friends of Harter Secrest & Emery LLP. It is intended for general information purposes only and should not be considered as legal advice. The contents are neither an exhaustive discussion nor do they purport to cover all developments in the area. The reader should consult with legal counsel to determine how applicable laws relate to specific situations. ©2020 Harter Secrest & Emery LLP

Disclaimer

This website presents only general information not intended as legal advice. Although we encourage calls, letters and emails from prospective clients, please keep in mind that merely contacting Harter Secrest & Emery LLP (HSE) does not establish an attorney-client relationship between us. Confidential information should not be sent to HSE until you have been notified in writing by HSE that a formal attorney-client relationship has been established. Information sent to us before then may not be treated as confidential by HSE or the court.

I have read this and agree     Cancel

Our website uses cookies. By continuing to use our site, you agree to our use of cookies in accordance with our Privacy Policy.