In late 2022 and early 2023, the SEC adopted four Final Rules that created a raft of new and detailed reporting requirements in Forms 10-Q and 10-K.  (The rules also affected proxy statements – more about that in a later post.)

This is the first of five posts that provide details and suggestions to help companies analyze and implement these changes in coming periodic reports. This post summarizes all the disclosure changes in Forms 10-K and 10-Q.  The next four posts will go into the details of the changes for each of the four new rules.  Here is a list of our upcoming posts to help appropriately implement these new disclosures requirements:

• • Insider Trading Arrangements and Related Disclosures (Rule 10b5-1 Plans) [Part 2 of 5]
  • Listing Standards for Recovery of Erroneously Awarded Compensation Disclosures [Part 3 of 5]
  • Share Repurchase Disclosure Modernization Disclosures [Part 4 of 5]
  • Pay Versus Performance Disclosures (Proxy statement only disclosures) [Part 5 of 5]

Below is a big-picture summary of all the Form 10-Q and 10-K disclosure changes, Item by Item:

Overview of Changes to Form 10-Q

Part II – Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

The old month-by-month table of share repurchases has been removed.  New exhibit 26 requires daily details of share repurchases.  New language in S-K Item 703 requires narrative disclosure of the rationale and purpose of share repurchases.  These changes are effective for the first full fiscal quarter beginning on or after October 1, 2023 (so the first time that this will appear for most companies is the 10-K for the year ended December 31, 2023).

Part II – Item 5. Other Information.

Now includes detailed disclosures of:

• • • Quarterly disclosures regarding the adoption, modification or termination by officers and directors of Rule 10b5-1 plans and “non-10b5-1 trading arrangements” (S-K Item 408(a)). This change was effective for the first full fiscal quarter beginning on or after April 1, 2023 – e., now.
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    • Company 10b5-1 plans. (S-K Item 408(d)) This change is effective for the first full fiscal quarter beginning on or after October 1, 2023 (so the first time that this will appear for most companies is the 10-K for the year ended December 31, 2023).

 Part II – Item 6 – Exhibits.

New exhibit in S-K Item 601:

• • • Exhibit 26 for daily details of share repurchases. This change is effective for the first full fiscal quarter beginning on or after October 1, 2023 (so the first time that this will appear for most companies is the 10-K for the year ended December 31, 2023).

Overview of Changes to Form 10-K

Two new check boxes on the cover page related to clawback disclosures:

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). □

These boxes already have been added to the cover of the 10-K; however, they will apply only to issuers with exchange-listed securities.  Additionally, for those issuers, no response to the disclosures is required until after October 2, 2023, when the exchange listing standards become effective.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The old month-by-month table of share repurchases has been removed.  New exhibit 26 requires daily details of share repurchases.  New language in S-K Item 703 requires narrative disclosure of the rationale and purpose of share repurchases. As stated above, these changes are effective for the first full fiscal quarter beginning on or after October 1, 2023 (so the first time that this will appear for most companies is the 10-K for the year ended December 31, 2023).

Item 9B. Other Information.

Now includes detailed disclosures of:

• • • Quarterly disclosures regarding the adoption, modification or termination by officers and directors of Rule 10b5-1 plans and “non-10b5-1 trading arrangements” (S-K Item 408(a)).As stated above, this change was effective for the first full fiscal quarter beginning on or after April 1, 2023 – e., now – and the fourth quarter of each year will be reflected in the 10-K.
    • Company 10b5-1 plans (S-K Item 408(d)). This change is effective for the first full fiscal quarter beginning on or after October 1, 2023 (so the first time that this will appear for most companies is the 10-K for the year ended December 31, 2023).

Item 10. Directors, Executive Officers and Corporate Governance.

Now includes information about insider trading policies – S-K Item 408(b). This change is effective for 10-Ks for fiscal year ending on or after December 31, 2024 as well as for proxy statements for 2025 annual meetings.

Item 11. Executive Compensation.

Now requires:

• • • Details of any recovery of erroneously awarded compensation (S-K 402(w)), and related changes to executive compensation disclosures.These disclosures are required on or after December 1, 2023 for issuers who have securities listed on a national securities exchange.
    • Disclosures about policies and practices related to the grant of certain equity awards close in time to the release of material nonpublic information (S-K Item 402(x)). This change is effective for 10-Ks for fiscal year ending on or after December 31, 2024 as well as for proxy statements for 2025 annual meetings.
    • (Note:The new pay versus performance disclosures (S-K 402(v)) are NOT required in Form 10-K.  They are only required in proxy statements.)

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Administrative updates related to recovery of erroneously awarded compensation (S-K Item 404, Instruction 5a)

Item 15. Exhibit and Financial Statement Schedules.

New exhibits, all in S-K Item 601:

• • • Exhibit 26 for daily details of share repurchases – as stated above, this change is effective for the first full fiscal quarter beginning on or after October 1, 2023 (so the first time that this will appear for most companies is the 10-K for the year ended December 31, 2023).
    • Exhibit 97 for clawback policies – as stated above, this change is effective on December 1, 2023 for issuers who have securities listed on a national securities exchange.
    • Exhibit 19 for insider trading policies – as stated above, this change is effective for 10-Ks for fiscal year ending on or after December 31, 2024.

Our next post will review the 10b5-1 plan  disclosures in detail.

As a final note, here are links to each of the Final Rules that create these changes:

Insider Trading Arrangements and Related Disclosures (Rule 10b5-1 Plans)

Listing Standards for Recovery of Erroneously Awarded Compensation Disclosures

Share Repurchase Disclosure Modernization Disclosures

Pay Versus Performance Disclosures

As always, your thoughts and comments are welcome!