SEC Corporate Finance Division Director Reviews Disclosure Priorities

As part of an SEC Division of Corporation Finance workshop, Division Director Erik Gerding highlighted "disclosure priorities for fiscal year 2024."

Mr. Gerding said that the Division will continue to monitor areas of focus highlighted in 2023 including "market disruptions in the banking industry, cybersecurity risks, the impact of inflation," as well as "disclosures by companies based or with a majority of their operations in the People's Republic of China." He added that the Division will focus on financial reporting topics, including those areas in which the Financial Accounting Standards Board, or the International Accounting Standards Board, issued accounting standards.

Mr. Gerding said that in 2024, the Division is prioritizing disclosures on artificial intelligence including "in the description of business section, risk factors, MD&A, the financial statements, and the board's role in risk oversight." He said that the Division is also considering how banks as well as office and retail REITS are disclosing commercial real estate risk.

Mr. Gerding said the Division will be reviewing disclosure compliance with recently adopted SEC rules. Specifically, he said that Division staff will review rules on:

• Cybersecurity, including current reports and selected annual disclosures about material cybersecurity incidents;
• Clawbacks, including disclosures on the filing of clawback policies and to assess disclosures when a recovery analysis is triggered;
• Pay versus performance, including "leverag[ing] machine-readable data to make preliminary assessments of compliance;"
• Proxy Rules, including proxy contest filings to assess compliance with the universal proxy rules and improve disclosures regarding shareholders' voting options; and
• Beneficial ownership reports, "to assess compliance with the new, shortened filing deadlines."