The SEC finalized new rules to update and expand the statistical disclosures bank and savings and loan institutions provide to investors.
The SEC finalized new rules to update and expand the statistical disclosures bank and savings and loan institutions provide to investors. The new requirements are responsive to the extensive changes that have occurred in the sector over the past 30 years since the rules were last updated.
On September 11, the SEC issued final rules that rescind Industry Guide 3 and codify updated and expanded disclosure requirements under Regulation S-K. New Regulation S-K Item 1400 updates and streamlines the statistical disclosure requirements for bank holding companies, banks, savings and loan holding companies, and savings and loan associations (together, “bank and savings and loan registrants”). The changes eliminate certain disclosure requirements that are duplicative of other SEC rules, US GAAP, or IFRS, and add certain credit ratio disclosures. The new rules apply to both domestic and foreign registrants, with certain exemptions for issuers applying IFRS.
The final rules instruct the registrant to use the same disclosure categories as those used under US GAAP or IFRS, as applicable, for disclosures related to investments in debt securities, loans, and the allowance for loan losses. The changes also eliminate certain disclosures, including, for example, those related to short-term borrowings, cross border outstandings, return on equity, and return on assets.
The SEC did not specify a location where the required statistical disclosures should be made within the filing. The following summarizes some of the key requirements:
Registrants should understand the new rules and plan to make the appropriate updates to their filings ahead of the mandatory compliance date and consider early adoption to take advantage of the updates. The new rules are intended to reduce compliance costs and streamline disclosure requirements by removing redundancies.
The rules will be effective 30 days after publication in the Federal Register and will apply to fiscal years ending on or after December 15, 2021. However, voluntary compliance with the new rules will be permitted in advance of the mandatory compliance date.