A Content Analysis of the Modernization of Regulation S-K Items 101, 103, and 105

Abstract

Listen

Translate article

In 2020, the U.S. Securities and Exchange Commission (SEC) adopted amendments to modernize the disclosure requirements of Regulation S-K Items 101, 103, and 105. These amendments aim to enhance the readability of disclosure documents and provide investors with more relevant information. This study conducts a content analysis of the modernized disclosure items to assess the extent and nature of the changes implemented. A sample of annual reports filed before and after the amendments was examined to determine whether the SEC meets its stated goals of improving the readability of disclosure documents and discouraging repetition and immaterial information. We conclude that the stated SEC goals for modernization were not met in terms of textual characteristics. These findings provide insights into the effectiveness of the SEC's efforts to update disclosure rules and improve investor’s informational value.