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U.S. comment letter on the effectiveness of financial disclosures about entities other than the registrant

Published on: Nov 24, 2015

Deloitte & Touche LLP comments on the SEC's "Request for Comment on the Effectiveness of Financial Disclosures about Entities Other than the Registrant," issued on September 25, 2015.

An excerpt from the comment letter is shown below:

We support the Commission’s objective of improving its disclosure requirements to enhance the information provided to investors and promote efficiency, competition, and capital formation. In general, transparent disclosures benefit all market participants and, most importantly, stand to help investors make informed investment decisions.

We believe that the SEC’s request for comment is consistent with the objective of its disclosure effectiveness initiative, which is to ensure that a registrant’s required disclosures are clear, concise, and focused on matters that are both material to investors and specific to the registrant. We agree that effective disclosures emphasize matters that the registrant believes to be the most relevant and material to investors. In addition, we support the Commission’s efforts to improve disclosures by seeking input from both investors and registrants, including (1) how investors use the disclosures in making investment decisions and (2) the challenges that registrants face in preparing and providing the required disclosures.

In response to the Commission’s request for comment, we considered potential changes to the disclosure requirements in S-X that could enhance the information provided to investors and promote efficiency, competition, and capital formation. Our comments presented herein are based on our experiences as auditors, the work we do with our clients, and the challenges we understand our clients face when preparing and providing these required disclosures. In addition to discussing how various disclosures could be reduced or eliminated, we propose alternative disclosures that may be more useful and concise for investors and consider the costs and benefits associated with preparing such disclosures. We encourage the Commission to continue outreach to investors to ensure that appropriate consideration is given to understanding how well the respective disclosure requirements are informing investors and how investors use the disclosures to make investment and voting decisions.

Full text of the comment letter is available below.

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