SEC Publishes Rule Proposals Impacting Structured Data Requirements

SEC Publishes Rule Proposals Impacting Structured Data Requirements

On December 15, 2021, the Securities and Exchange Commission (SEC) published the following three new rule proposals which have structured data requirements:

Share Repurchase Disclosure Modernization: The SEC has proposed amendments to its rules regarding disclosure about an issuer’s repurchases of its equity securities, also referred to as buybacks.  

The proposed Rule would require an issuer to provide a Form SR on purchases of equity securities for each day that it makes a share repurchase, to be provided before the end of the following business day. The proposed Form SR is designed to modernize and improve disclosure about repurchases of an issuer’s equity securities and would report any purchase made by or on behalf of the issuer or affiliated purchaser of shares. Disclosure requirements would include identifying the class of securities purchased, the total amount purchased, the average price paid, as well as the aggregate total amount purchased on the open market in reliance on the safe harbor in Exchange Act Rule 10b-18 or pursuant to a plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c). Form SR would be required to be reported in structured data format, with both block text and detail tagging using Inline XBRL. Comments on the proposed Rule are due 45 days after publication in the Federal Register.

Money Market Reforms: The SEC has proposed amendments to certain rules that govern money market funds under the Investment Company Act of 1940.  The main change would be the requirement that the Form N-CR be in XML format.  At the start of the COVID-19 pandemic growing economic concerns led investors to reallocate their assets into cash and short-term government securities which contributed to stress on short-term funding markets.  This proposal is designed, in part, to address concerns about money market funds highlighted by these events and would improve the resilience and transparency of these types of funds.  The Commission noted that they opted not to require Inline XBRL, “Due to the number of individual transactions that might be reported as Form N-CR data and the constrained nature of the content of Form N-CR and the absence of a clear need for the N-CR disclosures to be used outside the Form N-CR context, the alternative to include an Inline XBRL requirement might result in formatting for human readability of tabular data within a web browser that provides no additional analytical insight.” Comments are due 60 days after publication in the Federal Register.

Rule 10b5-1 and Insider Trading: The SEC has proposed amendments to Exchange Act Rule 10b5-1(c ) (1), as well as new disclosure requirements regarding insider trading policies.  These changes would address concerns about abuse of the current rule. As written, the proposed rule would require an issuer to disclose policies around insider trading and officer certification of those policies in Inline XBRL. Disclosure of grants of equity compensation awards would also need to be disclosed in Inline XBRL. Comments are due 45 days after publication in the Federal Register.

SEC filers need to stay up to date with all the latest changes, and they need their filing platform to be able to accommodate those changes. Contact us to see how we can help you and your company stay up to date with your compliance needs.