SEC Chairman Pushes Disclosure Reform to Focus on Key Risks

SEC Advances Modernization of Corporate Disclosures

SEC Chairman Paul Atkins recently proposed modernizing the way companies disclose risks, emphasizing that current practices often lead to boilerplate disclosures that offer little value to investors.

In a recent law school speech, Atkins argued that companies should focus on material risks specific to their business, rather than listing generic scenarios to avoid legal exposure. He believes this shift would improve transparency and reduce compliance burdens.

Annual Compliance Costs Reach $2.7 Billion

According to SEC estimates, public companies spend $2.7 billion annually on preparing and filing annual reports. This highlights the complexity of the current disclosure system and the need for reform.

• Streamlining disclosures could cut costs
• Improve relevance and clarity of risk information
• Enhance investor understanding and decision-making

Atkins urged collaboration between regulators and industry leaders to design a more efficient, principle-based disclosure framework.