Regulation S-K

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Regulation S-K is a Securities and Exchange Commission (SEC) regulation that outlines how registrants should disclose material qualitative descriptors of their business on registration statements, periodic reports, and any other filings. The text of Regulation S-K can be found in 17 CFR Part 229. Compare with Regulation S-X, which outlines how issuers should disclose quantitative descriptors, such as financial statements, in filings. 

Application 

Regulation S-K prescribes qualitative disclosures for a broad range of filings, both for those under the Securities Act and for those under the Exchange Act. Item 10 of Regulation S-K states that the requirements of Regulation S-K apply to registration statements for initial public offerings (IPOs) and shelf offerings, registration statements under Section 12 of the Exchange Act, periodic reports, going-private statements, tender offers, proxy statements, and any other documents required to be filed under the Exchange Act. Regulation S-K most commonly arises when drafting a Form S-1, Form 10-K, or Form 8-K

Requirements

Regulation S-K is broken down into different topics and items, each requiring the registrant to disclose a description of a different material aspect of their operations.

See below for an outline of Regulation S-K requirements, highlighting important provisions, by regulatory subpart and items:

  • Business, Subpart 229.100. Items 101-102 requires the registrant to describe the general development of business and the location and general character of their property. Item 303 requires the registrant to disclose any ongoing material legal proceedings. Item 105 contains the risk factors. 
  • Securities of the Registrant, Subpart 229.200. Items 201 and 202 require the registrant to disclose information on their securities, such as market price and dividends.
  • Financial Information, Subpart 229.300. Item 301 requires the registrant to present select financial data for the last five fiscal years, such as net sales and income. Item 303 contains management’s discussion and analysis (MD&A) of financial condition and results of operation. Items 307 and 308 discuss internal controls and procedures to ensure the integrity of financial reporting. 
  • Management and Certain Security Holders, Subpart 229.400. Items 401-402 require the registrant to disclose its directors, executive officers, and control persons, and executive compensation. Items 403-404 requires the registrant to disclose any ownership of or transacting in registrant’s securities by these individuals. Item 407 requires the registrant to disclose certain corporate governance matters, such as director independence; the composition of the audit committee, compensation committee, nominating committee, and any other committees. 
  • Registration Statement and Prospectus Provisions, Subpart 229.500. Item 503 requires the registrant to summarize the prospectus. Items 504-508 require the registrant to describe how they plan to use and distribute the proceeds of an offering, if applicable, how they determined the offering price, whether the offering will dilute existing shares, and whether existing security-holders are selling their security in the offerings.

Recent Amendments 

Effective as of November 2020, the SEC amended the description of business, legal proceedings, and risk factor disclosures in Regulation S-K. The amendments shifted to a principles-based disclosure regime, allowing registrants greater discretion in determining which developments meet the materiality threshold and therefore must be disclosed. Among other changes, registrants must now: describe their human capital resources; describe regulatory compliance with all material government regulations, not just environmental laws; and disclose material changes to a previously disclosed business strategy. The amendments also eliminated the five-year and three-year disclosure timeframes, instead requiring the registrant to focus on materiality. For more information, see The New SEC Regulation S-K Rules by the Harvard Law School Forum on Corporate Governance.

[Last updated in January of 2022 by the Wex Definitions Team]