SEC Chair Targets "Avalanche" of Immaterial Disclosures
Commentary by Steven Lofchie
SEC Chair Paul Atkins directed the Division of Corporation Finance to streamline the agency's central disclosure regulation to avoid "compelling the disclosure of immaterial information."
In his statement, Mr. Atkins argued that Regulation S-K has grown from the size of a "gym locker" to an "artificial-intelligence data center." He asserted that the current regime elicits a "plethora of undisputably immaterial information" that forces investors to try and "separate the wheat from the chaff." He stated that burying shareholders in an "avalanche of immaterial information" is a result that "neither protects investors nor facilitates capital formation."
Mr. Atkins noted that the staff is already "evaluating" and preparing recommendations based on over 70 comment letters on executive compensation disclosures, and that he is now requesting comment on the other requirements of Regulation S-K.
Mr. Atkins requested that comments be submitted by April 13, 2026.
Commentary
The approach taken by Chair Atkins to reduce the tasks demanded of public issuers - and the expenses of those tasks - runs counter to his predecessor's approach and seems more likely to encourage private issuers to go public.
In considering why issuers did not choose to go public, but instead to rely on the private markets for financing, the former SEC Chair took the view that the reporting burdens imposed on private issuers were insufficient, and if only those burdens were increased, then going public would seem less unattractive. (Never mind that Mr. Gensler sought to pile on new burdens, such as those related to climate disclosure, on public issuers even faster than he could place them on private issuers.)