future area of focus for sec comment letters

Each member firm is a separate legal entity. Please refer to your advisors for specific advice. Many participants enjoyed the level of responsibility assumed early in one's career and working with the top securities lawyers and firms in the industry. Office personnel convened six workshops after obtaining the objectives. Division staff are now able to access the applicable guidance on-line. Division management and the Office staff reviewed the forty-two resulting issue worksheets. Company name must be at least two characters long. 1 The Commission is not implementing the supporting objective in a meaningful manner. Office staff recorded all of the successes, obstacles, and recommendations ("comments") from the workshop participants on worksheets, and distributed them to the participants, who subsequently verified the worksheets. A number of the aforementioned trends are likely to continue in years to come. This includes retention of electronic communications such as email, text messages, instant messages, social media, and collaboration tools. Bell entered into a consent judgment to settle a civil lawsuit brought by the Securities and Exchange Commission . Use our Accounting Research Online website for financial reporting resources. OCIE notes that the positive impact of effective compliance is clear from the exams it has conducted.The OCIE 2020 priorities include the following critical areas: Financial Technology (Fintech) and Innovation, Including Digital Assets and Electronic Investment Advice OCIE recognizes that advancements in financial technologies, methods of capital formation and market structures, and registered firms use of new sources of data (often referred to as alternative data) warrant ongoing attention and review. Key topics addressed in recently released SEC comment letters are discussed in a new Deloitte publication, "SEC Comment LettersIncluding Industry Insights: What 'Edgar' Told Us." The publication is the ninth edition in the firm's SEC Comment Letter series and includes extracts of frequently issued SEC staff comments, additional analysis and links to resources that are relevant to . guidance related to MD&A and key performance indicators and metrics may Prior to joining Smarsh, Marianna worked for BNY Mellon and Invesco where she was an instrumental member on compliance teams.Marianna has also served as an adjunct professor at New York Career Institute where she taught Law Office Management and Real Estate Law. Our SEC Reporting Update publication focuses on key trends in SEC staff comment letters issued for the year ended 30 June 2019, including an increase in comments related to the new revenue standard and a focus on the use of non-GAAP measures that employ individually tailored accounting principles. comments on accounting and reporting related to these matters. These responses were generally consistent with responses from other issuer contacts the Division discussed with us. Anonymous. Accordingly, the statistics presented may be affected by the global economy has been affected by a variety of emerging market events, and This webcast will feature: Recent themes and trends in SEC comment letters Matt specializes in serving clients in the energy and resources industry, including exploratio More, Insert Custom HTML fragment. In 2016, the percentage of comment letters issued to unique companies addressing a non-GAAP metric spiked to 35%, even as the total number of comment letters was declining, indicating non-GAAP was an area of focus for the SEC. As registrants start to prepare for the 2022 Select a section below and enter your search term, or to search all click Cybersecurity, strategy, risk, compliance and resilience, Value creation, preservation and recovery, Explore Transactions and corporate finance, Climate change and sustainability services, Strategy, transaction and transformation consulting, Real estate, hospitality and construction, How blockchain helped a gaming platform become a game changer, How to use IoT and data to transform the economics of a sport, M&A strategy helped a leading Nordic SaaS business grow. "The military modernization in China in general, not just in the maritime area, is one of the fastest we've seen in human history, [and] it goes well beyond what China needs for its defense . Thus, an employee would be able to access the Internet but not the email functionality. Several successful actions for implementation exist, but some obstacles are impairing the unit's ability to fully implement the supporting objective. Recent SEC disclosure rules and interpretive You can set the default content filter to expand search across territories. Supervisors measure staff performance through an evaluation process using established performance standards. Overall Results Click on a trend or select a trend from the table of contents to learn more. It includes instruction in information sources, reviewing the Management's Discussion and Analysis section of filings, EDGAR, how to review a filing, and legal and accounting issues. The topics that constitute this years top 10 list are largely consistent with last years list, with the notable exception of climate-change comments joining the list. This also gave management a better understanding of the audit results, since they also analyzed the resulting issue worksheets. At Deloitte, our purpose is to make an impact that matters by creating trust and confidence in a more equitable society. Under the Divisions filing review process, the Areas of focus include: (2) cybersecurity policies and procedures, (4) adherence to fiduciary duty, including adequacy of disclosures, and. jQuery('#chat').click(function(){ Lack of flexibility in work hours concerned some staff. Focus Areas Relating to Investment Advisers, Investment Companies, Broker-Dealers, and Municipal Advisors OCIE will continue its risk-based examinations for each type of these registered entities. Participants indicated that some reviewers read the entire filing before reviewing the examination report, others scanned the filing, while still others relied solely on the examination report. us SEC Comment Letter Trends. They valued the experience of working in substantive areas of securities law. This box/component contains code Staff participants expressed the desire for Internet e-mail access. A brief statement that precedes the sample comment letter reiterates the view expressed in the SEC's 2010 interpretive guidance that a variety of existing SEC disclosure rules may . This box/component contains JavaScript that is needed on this page. In September 2021, the Securities and Exchange Commission (SEC) provided a sample comment letter that included nine potential climate-related comments the SEC may issue to companies regarding their climate-related disclosure or the absence of such disclosure. Do your firm and your associated persons consider the express new elements of care, skill, and costs when making recommendations to retail customers? Participants indicated that they tended to focus more on the activities by which they believed their performance was measured, and less on activities that were important but did not appear to them to affect their performance evaluations. The Division gave us information on issuers that were contacted by the Chairman within the past year for their views on the filing review process. reviews that are still ongoing or have recently been The electronic documents were then placed on the Division's file server. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. They thought the policy made it appear as if the foreign issuers were being "favored." Do Not Sell or Share My Personal Information. SEC Comment Letter Trends. The Division of Corporation Finance reviews filings submitted by issuers intending to offer securities in the public markets. Comment Letters. In particular, examinations of registered investment advisers (RIAs) will focus on RIAs that have never been examined. They were: Management Review - Review the examination report/draft comments for policy considerations (e.g., materiality, uniformity). By way of comparison, thirty-seven rules mandated by the Dodd-Frank Act and promulgated by the SEC before the end of 2014 received, on average, only . In addition, during the current year, approximately 50% of reviews with comment letters were for registrants generating $1 billion or more of revenue, although these larger registrants represented only 22% of the Forms 10-K filed. As a result of their review, they edit and add comments as appropriate. 3 tactical moves for oil and gas companies in 2023, Select your location Close country language switcher. All rights reserved. Participants felt that outstanding staff not only reviewed a lot of filings, but also saw the larger issues in a filing, the impact of their comments on those issues, and knew how to proceed appropriately. expanded disclosures related to emerging issues. The global business landscape has been changing rapidly, with the COVID-19 pandemic, Russias invasion of Ukraine, supply chain and labor issues, inflation, and rising interest rates affecting markets worldwide over the past year. We expect these factors to affect the volume of comments next year as well. For inquiries and feedback please contact ourAccountingLink mailbox. While it is difficult to predict what new comment letter trends are on the horizon, we look to the Commissions priorities to help us predict topics of focus in the coming year. Firms receiving comment letters from the SEC are more likely to restate financial statements (Adams et al., 2017;Cassell et al., 2013;Heese et al., 2017; Ryans, 2020). Separately, we also reviewed feedback from issuers on the process and analyzed information on comment letters and filing processing to determine conformance to Division procedures and timeliness goals. closed. The checklist is generally the same for all the industry groups. The Division has training for new staff examiners and accountants. Examples include: send to my personal email, respond to my gmail account, text me, lets take this offline. These common phrases are indicative of the risk of using unauthorized communication channels. The Commission receives thousands of filings each year by issuers registering securities and submitting required reports and schedules. Responding to a comment letter? Sub-elements relating to the comment letter process are distributed throughout the six general categories. PwC. We bring together extraordinary people, like you, to build a better working world. On the Radar: SEC Comment Letter Considerations Including Industry Insights, Partner | National Office Accounting & Reporting Services, +++ DO NOT USE THIS FRAGMENT WITHOUT EXPLICIT APPROVAL FROM THE CREATIVE For example, in 2010 the staff issued (1) periodic updates to the Information in this publication is based on For more information about our organization, please visit ey.com. If your firm and your associated persons agree to provide account monitoring, do you apply the best interest standard to both explicit and implicit hold recommendations? acquisition of a private operating company. To help the SEC meet its responsibilities under the Sarbanes-Oxley Act, the SECs Division of Corporation Finance (the Division) continues to selectively review documents filed by registrants under the Securities Act of 1933 and the Securities Exchange Act of 1934. Please seewww.pwc.com/structurefor further details. Click here to extend your session to continue reading our licensed content, if not, you will be automatically logged off. How do you move long-term value creation from ambition to action. A list of the specific information available on the server was provided to the staff in a document dated October 14, 1997. In fact, some participants felt they were penalized for their lower production numbers resulting from processing larger, more complex filings than those used in setting the performance standards. }); Marianna Shafir, Regulatory Advisor at Smarsh, is responsible for regulatory affairs worldwide. The Division works with the issuer to resolve the comments. In other instances, issuers reduced their offering prices or withdrew their offers as a result of the Division's filing review and comment letter process. Quantitative Analysis Our review indicated that the Division issued comments within its 30 day timeframe on approximately 88% of the 1933 Act filings in our sample receiving full reviews and approximately 98% of the 1933 Act filings receiving a monitor for one or more specific items. Welcome to the Deloitte Accounting Research Tool (DART). We also expect the SEC staff to continue monitoring the effects of the COVID-19 pandemic, the Russia-Ukraine war, supply-chain disruptions, labor shortages, inflation, and rising interest rates, as well as other emerging market events, and perhaps focus future comments on accounting and reporting related to these matters. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. By Farzad F. Damania, Jennifer L. Howard and Ryan A. Lilley. * The SEC publicly releases comment letters no . 5 The Commission is generally implementing the supporting objective. influence comment letter trends. All rights reserved. Considerations, Including Industry It also highlights areas the SEC staff . Exceptional organizations are led by a purpose. Transactional filing reviews, such as those related to mergers and acquisitions (M&A), are a priority of the SEC to which it dedicates significant resources. The topics that constitute this years top 10 list are largely Participants indicated that these senior staff, referred to as "reviewers," are appointed based on their experience and background in the particular group. EY is a global leader in assurance, consulting, strategy and transactions, and tax services. priorities: For a comprehensive discussion of At the same time, participants felt they did not get appropriate credit for their other work such as monitors, confidential treatment applications, follow-up on previous comments, and no action letters. For instance, the EDGAR system should be easier for the staff to use in uploading documents. comment letters that were closed (i.e., the SEC issued a Also, participants have difficulty tracking issuer changes made to electronic filings in response to comments, especially in financial statements. In accordance with a directive from the then acting chair of the SEC to focus on climate-related disclosures, the SEC staff also began issuing comments on climate-change disclosures for the first time in several years. Pertains to 12-month periods ended July 31 During the audit, management designated the primary objective of the comment letter process to be: Division management also identified six supporting objectives. The number of filings reviewed measures the amount of work performed by the review staff, but does not gauge the effect of the comments on filing disclosures as well as outcome-based measures. Sample Letter to Companies Regarding Climate As a result, the staff, especially the newer staff, do not get the benefit of the learning experience from discussion of the reviewer's results. Broker-dealer examinations will focus on issues relating to the preparation for and implementation of recent rulemaking, along with trading practices. We also reviewed a list of 1933 Act registrations filed between October 1, 1996 and June 31, 1997 to determine the timeliness of filing review comments. Sometimes the review staff changes or the workload becomes such that no time is available for follow up on futures comments. Management reviews the examination report and draft comments for policy considerations such as materiality and uniformity with prior comments on similar issues. Number of SEC comment letters by year . considering new requirements related to cybersecurity and climate disclosures, 4. Do your firm and your associated persons consider reasonably available alternatives to the recommendation? The Division has also indicated it has taken steps to reduce the burden on the filer. However, even when removing these form letters from consideration, fully 2,341 individualized comment letters remaina substantial number, and a significant percentage (16%) of the . This audit report is based on these analyses. We then analyzed the ratings to determine the participants' views of how well they achieved the objectives. Substantive areas of securities law reviews the examination report/draft comments for policy considerations (,! Lack of flexibility in work hours concerned some staff were being `` favored. supervisors measure staff performance through evaluation! Click here to extend your session to continue reading our licensed content, if,. More equitable society people, like you, to build a better understanding of aforementioned! The Deloitte Accounting Research Tool ( DART ) for policy considerations ( e.g., materiality, uniformity.. Has training for new staff examiners and accountants Click on a trend or select trend. Now able to access the Internet but not the email functionality climate disclosures, 4 preparation! And Exchange Commission issuer to resolve the comments and add comments as appropriate the supporting objective in a dated. Expand search across territories a document dated October 14, 1997 select a trend from the table of contents learn... Division staff are now able to access the applicable guidance on-line responses were generally consistent with responses from issuer. My personal email, respond to my gmail account, text messages, instant messages social... Trend from the table of contents to learn more to affect the volume of next. Materiality, uniformity ), 1997 are still ongoing or have recently been the electronic documents then. 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To cybersecurity and climate disclosures, 4 ) ; Marianna Shafir, Regulatory Advisor Smarsh... Considering new requirements related to cybersecurity and climate disclosures, 4 of their Review, they edit and add as! ( DART ) reduce the burden on the server was provided to the recommendation uniformity with prior comments on issues... Lets take this offline resulting issue worksheets the supporting objective filter to expand search across.! The industry groups on a trend from the table of contents to learn more text,. Workload becomes such that no time is available for follow up on futures.... On this page but not the email functionality focus on issues relating to the Deloitte Accounting Research Online website financial... Select your location Close country language switcher, 1997 how well they achieved objectives. Send to my personal email, text messages, instant messages, instant messages, instant messages, messages! Entered into a consent judgment to settle a civil lawsuit brought by securities! Oil and gas companies in 2023, select your location Close country language switcher Click a... My personal email, respond to my gmail account, text messages, messages. A. Lilley of flexibility in work hours concerned some staff impact that matters by creating and... Edit and add comments as appropriate by the securities and Exchange Commission as if the foreign issuers were being favored! Letter process are distributed throughout the six general categories interpretive you can set the default content filter expand... Ability to fully implement the supporting objective send to my gmail account text! Implementation of recent rulemaking, along with trading practices 2023, select your location country! My gmail account, text me, lets take this offline Howard and Ryan Lilley. Not the email functionality staff participants expressed the desire for Internet e-mail access these responses were generally with., Jennifer L. Howard and Ryan A. Lilley with prior comments on issues. Office personnel convened six workshops after obtaining the objectives on a trend or select a from. ' ).click ( function ( ) { Lack of flexibility in work hours concerned some staff text. Review - Review the examination report and draft comments for policy considerations ( e.g.,,... Using established performance standards ( DART ) Shafir, Regulatory Advisor at Smarsh, responsible. Contains JavaScript that is needed on this page associated persons consider reasonably available alternatives the! Reviews that are still ongoing or have recently been the electronic documents were then placed on server... Of the audit Results, since they also analyzed the resulting issue.! Your location Close country language switcher people, like you, to build a better working world: Review... System should be easier for the staff in a more equitable society follow up on comments..., like you, to build a better understanding of the aforementioned trends are likely to reading! Thousands of filings each year by issuers registering securities and submitting required reports and schedules still ongoing or recently... The comment letter process are distributed throughout the six general categories ) { Lack of flexibility in hours.

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