• US Securities and Exchange Commission Proposes New Short-Term Borrowings Disclosure
  • October 4, 2010
  • Law Firm: Mayer Brown LLP - Chicago Office
  • On September 17, 2010, the Securities and Exchange Commission (SEC) unanimously approved Release Nos. 33-9143; 34-629321 (the Proposing Release), proposing a new, separately captioned subsection of Management’s Discussion and Analysis of Financial Condition and Results of Operations (MDA) that would contain detailed quantitative and qualitative information about a registrant’s short-term borrowings for annual and quarterly periods. This proposal is designed to address balance sheet “window dressing,” a practice whereby some companies intentionally pay down short-term indebtedness just before the end of a reporting period so that such debt, which may be important to the company’s operations, does not appear on the balance sheet. The proposed amendments would highlight shortterm financing practices throughout a period, rather than providing only a period-end snapshot. They would codify in new Item 303(a)(6) of Regulation S-K an adaptation of current Industry Guide 3, Statistical Disclosure by Bank Holding Companies (Guide 3), which would be applicable to all companies that provide MD&A disclosure. Comments on the short-term borrowings disclosure proposal are due on or before November 29, 2010.