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To explain the new rules, forms, and amendments to current rules and forms (Final Rule) that the Securities and Exchange Commission (SEC) has adopted to modernize the reporting of information provided by registered investment companies (funds) and to improve the quality and type of information that funds provide to the SEC and investors.

Discusses the background leading up to the Final Rule, provides an overview and summary of the Final Rule’s key components, and highlights issues that may be raised by the new reporting regime.

The Final Rule will have a significant effect on many funds. Funds will experience a substantially increased reporting burden with respect to both the frequency of reporting and the granularity of information required.

Fund managers and fund service providers should begin to evaluate the impact of the Final Rule, the processes that will need to be implemented to prepare filings on new forms, and the changes in fund disclosure practices that will be required in response to the amendments to certain forms.

Practical guidance from financial services lawyers specializing in the investment management industry.

This article examines the comprehensive amendments recently adopted by the US Securities and Exchange Commission (SEC) to its accounting and other rules that govern financial statement filing requirements for significant business acquisitions and dispositions.

The article provides an in-depth analysis of the rule changes in the context of the SEC’s attempt to balance the right of investors to obtain adequate information about the impact of an acquired or disposed business on an SEC registrant against the filing burdens that can result from over-identification of acquisitions or dispositions as material to the registrant based on the SEC’s “significance” tests.

The rule amendments bring enhanced coherence to a reporting framework that has been characterized in part by inconsistencies, gaps, unreliable valuation principles, and ambiguities. The amendments contribute to the SEC’s ongoing disclosure effectiveness initiative by updating, clarifying, and codifying many requirements that had developed piecemeal in market practice or through guidance issued by the SEC’s staff.

This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.

Part I introduces the background of why materiality matters in financial statements. One of the main reasons for determining whether a fact is material is to check whether its misstatement overtakes the watershed which makes financial statements not comply with the relative financial reporting framework.

This part also introduces one of the themes of the book: the interaction of the views of the different subjects involved in materiality assessment, i.e., users, preparers, auditors, regulators, and the related conflicts of interest. Materiality plays a different role in this depending on who is looking at it.

The part also comprises an overview of the main projects underlying the current debate about materiality, that is, the International Accounting Standards Board’s Disclosure Initiative, the Financial Accounting Standards Board’s Disclosure Framework and the SEC’s Disclosure Effectiveness Initiative, including a list of their main steps and documents issued to date.

This study investigates the influence of the Securities and Exchange Commission (SEC) on the interpretation and application of International Financial Reporting Standards (IFRS) by examining a group of SEC-selected foreign private issuers filing 2005 annual reports in the USA and reporting using IFRS for the first time.

This paper uses hand-collected information from SEC comment letters to analyze IFRS topics and documents the ultimate resolution of each SEC comment (no change to filing, current change to filing or prospective change to future filing). The authors use descriptive statistical analyses, as well as a logistic regression model involving the resolution of each SEC comment, to examine the SEC’s influence on the interpretation of IFRS.

The study finds both higher comment totals, and higher numbers of required filing modifications, for those IFRS pronouncements which were identified as needing improvement during the 2006-2008 convergence efforts by the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB). Additionally, the study documents a decreasing likelihood of a filing modification when US generally accepted accounting principles (US GAAP) guidance is referenced in comment letter correspondence involving IFRS topics.

The study extends the IFRS literature and the SEC comment letter literature by focusing on the resolution of comments directed at IFRS disclosures, as well as exploring the factors which influence whether a comment ultimately requires a filing modification.

This paper addresses the following questions: Why do some firms employ multiple debt types? What explains debt heterogeneity? Is the choice of the source of debt a function of corporate governance?

The author's paper is empirical and uses multiple regression analysis.

Firms under weak corporate governance have a higher propensity to use multiple debt types and have a dispersed debt structure. Contrastingly, firms that are well-managed tend to concentrate debt and borrow predominantly from a few creditors. The author also found that while bank debt is negatively associated with debt concentration, market debt is positively associated with debt concentration.

Firms under weak corporate governance have a higher propensity to use multiple debt types and have a dispersed debt structure. Well-managed firms tend to concentrate debt and borrow predominantly from a few creditors. Bank debt is negatively associated with debt concentration and market debt is positively associated with debt concentration.

Policymakers and practitioners need to account not only for changes in the firm’s total debt level but also for changes within the firm’s debt composition. Understanding a manager’s choice of debt structure can incentivize creditors to effectively monitor and use debt concentration as a form of commitment device that transfers some control rights from the manager to creditors.

While a vast body of corporate finance literature examines the conflict between shareholders and management, there is little empirical work on the conflict between creditors and management. In this paper, the author examines how managerial entrenchment affects debt structure. The results provide a comprehensive picture of how corporate governance influences debt choice(s).

To explain proposed rules recently issued by the US Securities and Exchange Commission (SEC) that would dramatically expand both public and non-public reporting of portfolios and other data by US registered investment companies. A companion article covers new reports proposed at the same time for investment advisers that file Form ADV with the SEC.

Explains how the proposed rules intend to rescind Form N-Q and adopt a new portfolio holding form, Form N-PORT, which would require expansive monthly portfolio and risk reporting; describes amendments to Regulation S-X which would both enhance and standardize derivatives disclosures in fund financial statements; and details the reporting requirements for a new annual ‘census-style’ reporting form, Form N-CEN, which would replace an obsolete existing SEC form, Form N-SAR.

While it still remains to be seen how the final rules will be written, it is clear that US registered investment companies will be subject to broader reporting requirements. Investment companies are likely to incur increased costs due to the detailed nature of the information being requested and the frequency with which they will be required to file. Access to additional and enhanced information will have consequences for investment companies with respect to SEC examinations and enforcement activity.

Senior management and boards of investment companies should understand the basic framework of the proposed requirements. An operations and finance working group may need to be established by companies in order to coordinate the planning and preparation process for the requirements. Firms also should determine whether their service providers have the necessary resources to assist in complying with the proposed filing requirements.

Practical guidance from experienced investment funds lawyer.

Design and build (D/B) construction methods have gained more importance in recent years for their potential advantages in improving project performance. There are, however, a number of problems that are commonplace in D/B procurement, which, when they interact with each other, can lead to project time and cost overrun problems. The most important among them are design changes, together with communication and coordination lapses among concerned parties. Past research has focused only on the characteristics of the traditional construction, or separate sub‐systems such as different phases or human resource input to projects. An attempt is made in this paper to improve D/B project time and cost performance. A generic system dynamics model is developed that incorporates major sub‐systems and their relationships inherent in D/B constructions projects. It is validated and calibrated for a typical large D/B infrastructure project using time and cost overrun problems experienced in Thailand. Extensive simulations with many policies, individually or in various combinations, show that improvement in time or cost can be made with proper policy combinations that reflect strong interactions between the whole design and build system and can be derived only if these interactions are accounted for. To achieve overall improvement in both time and cost, the combination of full overtime schedule, average material ordering, and fast track construction with moderate crashing of design is most appropriate. If cost is the focus, extending the construction schedule, combined with material ordering based on actual need, and design and build with traditional construction method is the best solution.

In 1997, the Securities and Exchange Commission (SEC) issued new disclosure rules in an amendment to Regulation S‐X. This release requires the disclosure of both qualitative and quantitative information about market risk by all companies registered with the SEC for annual periods ending after 15 June 1998. Larger companies, with market capitalizations in excess of $2.5 billion, banks, and thrifts were required to apply the regulation’s provisions for annual periods after 15 June 1997. This paper presents results of an analysis of the market risk disclosures by the Dow 30 companies for 1997. The provisions of the amendment requiring the disclosure of qualitative information about market risk by were generally followed by all of the companies contained in the DOW 30. Compliance with the other aspects of the amendment was mixed. These failures might be attributed to confusion over the provisions of the amendment. The results of this study indicate that further evidence is needed on the ability of companies to follow the provisions of the amendment.

The purpose of this paper is to explain the SEC's proposed rule to modify the oil and gas reporting requirements that have been defined heretofore in Rule 4‐10, Regulation S‐X.

The paper explains the provisions of the existing rule, outlines the SEC's proposed changes (such as allowing companies to disclose reserves using probabilistic methodologies and tightening project maturity requirements for proved reserves), and explains why the proposed rule is an ambitious and overdue step to overhaul the SEC's oil and gas disclosure regime.

The alert discusses the SEC's proposed new rule that will replace the existing standard for disclosing volumes of oil and gas reserves in SEC filings. The rule applies to all US oil and gas public companies and also foreign oil and gas companies whose shares are traded on US exchanges via American Depositary Receipts (ADRs). Some of the larger non‐US companies affected by this rule change include Royal Dutch Shell, BP, Total, Eni, StatoilHydro, Petrobras, and CNOOC.

The paper shows that the proposed rule will be of interest to oil and gas companies, research analysts at investment banks that publish reports about oil and gas companies, and any firms that engage in proprietary investing in these companies. This rule change has broad interest for many companies. For example, in addition to dozens of oil and gas industry firms, the 80 firms and individuals who commented on the Concept Release that preceded this proposed rule included major financial institutions, rating agencies, and investment banks.

Part II contrasts the views of materiality in the Conceptual Frameworks of the IASB, FASB, IPSAS, and other framework such as the Integrated Reporting. In particular, it analyzes at what level and how differently that concept interacts with the qualitative characteristics of financial information in each of those frameworks. It looks at its pervasiveness and entity specificity, the interlock with the concept of relevance, reliability and faithful representation, completeness, understandability, neutrality, and drills down to the link to recognition.

This part then compares the definitions of materiality in different standards and contexts, to then draw a taxonomy of materiality and its attributes, such as the subject matter, thecontext of assessment, the addressees, the assessor, and the materiality test. A large part of the analysis involves the comparison between legal definitions of materiality and characterizations in the accounting, financial, and larger management contexts.