SEC Pushes for More Corporate Transparency

Written by obenlegal

January 13, 2022

The Run-Down: The Security and Exchange Commission, or the SEC, is pushing for more corporate transparency for private companies

  1. Regulators plan to require more stringent disclosure practices for large corporations amidst concerns that these companies have a massive impact on the economy at large with little transparency
  2. Regulators claim they have no intentions of including smaller companies in this plan
  3. Many have pushed back against this, citing worries that the SEC will require unnecessary disclosure of private information that the public should not be privy to

Why You Should Care:

The SEC has made it clear that it plans to require more transparency from corporations moving forward. Between this news and the Biden administration’s crackdown on corporate crime, it seems that large organizations will be under a microscope for at least the next few years to come. While the plan is still being fleshed out, the SEC is hoping to include corporate financial and operational disclosure requirements, and potentially even tightening the investor qualifications and increasing the amount of information nonpublic companies must file. 

It may seem like if your organization is smaller, you shouldn’t worry about these new developments. However, as we have seen, regulations can change by the minute. It is important that regardless of the size of your organization, your company stays aware of the ever-changing legal landscape. For now, the SEC is focused on large organizations, but as they put this plan in motion, they may find a need to expand these requirements. By staying vigilant, your organization will be able to better protect itself and be prepared for any updates. Taking a proactive approach will save your company many future headaches, and hopefully some money too. Investing in quality compliance measures will be key in moving forward successfully for all organizations.

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