Public Company Disclosure Requirements: SEC Proposes New Disclosure Requirements Relating to Short-Term Borrowings and Approves Interpretive Guidance on Liquidity and Capital Resources Disclosures

Sullivan & Cromwell LLP - September 20, 2010

At an open meeting on Friday, September 17, 2010, the SEC voted to propose rules that would require a public company to provide certain enhanced disclosures about its short-term borrowings in its filings with the SEC. The SEC also voted to approve the issuance of an interpretive release to provide guidance regarding the SEC’s current disclosure requirements in the MD&A relating to liquidity and capital resources. The objective of these initiatives is to address so-called “balance sheet window-dressing” by requiring disclosure about a public company’s leverage and liquidity throughout the course of the relevant reporting period rather than only at period-end.