June 2, 2016

Corporate Alert: SEC Amends 10-K to Expressly Permit Inclusion of Summary

As required by Section 72001 of the Fixing America’s Surface Transportation (FAST) Act, the SEC has adopted an interim final amendment permitting issuers to include a summary in Form 10-K filings, subject to specified conditions, while recognizing that existing rules don’t prohibit the inclusion of a summary or other voluntary information in a Form 10-K.

The amendment adds new Item 16 to expressly allow a registrant, at its option, to include a summary, provided that each summary topic is hyperlinked to the related, more detailed disclosure item in the Form 10-K. A registrant may decide which items to summarize as long as the information is presented fairly and accurately. The new item does not address the length or location of the summary.

If the summary discusses information incorporated by reference into the Form 10-K from an included exhibit, it must include a hyperlink to the discussion in such exhibit. However, the summary may only summarize information that is included in the Form 10-K at the time of filing. As a result, registrants will not be permitted to summarize Part III information incorporated by reference from a to-be-filed proxy or information statement, and in that case the summary must indicate that it omits the Part III information (however, registrants need not update the summary to reflect such Part III information when it is filed).

The amendment will affect registrants that currently include summaries in their Form 10-Ks (and intend to continue to do so) but don’t cross-reference items, use cross-references other than hyperlinks or use hyperlinks for only some disclosure topics included in the summary.

Because the amendment conforms Form 10-K to the requirements of the FAST Act, and involves minimal exercise of discretion, the SEC determined that notice and public comment were unnecessary prior to effectiveness and found good cause for the amendment to take effect upon publication in the Federal Register. Comments have been requested.


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