On January 4, OMB’s Office of Information and Regulatory Affairs released the federal government’s Fall 2022 Unified Agenda of Regulatory and Deregulatory Actions, a listing of the rulemaking activities that the various federal administrative agencies plan to undertake in the near and long term. The SEC’s contribution to this list, which is referred to as the agency’s Reg Flex Agenda, updates the timing for action on several projects of interest to audit committees. See SEC Rulemaking is in Hyperdrive: Spring 2022 Regulatory Agenda, June-July 2022 Update. If the SEC sticks to its updated agenda, the next 12 weeks will be extremely busy. By May 1, there could be significant changes in the public company disclosure landscape.
The Commission anticipates adopting final rules before the end of April 2023 on both climate change disclosure and cybersecurity risk governance disclosure. The far-reaching and controversial climate change disclosure proposals were published for comment in March 2022. See SEC Unveils its Climate Disclosure Proposals, March 2022 Update. Rules to inform investors about cybersecurity risk management, strategy, and governance, and to require disclosure of material cybersecurity incidents, were also proposed in March 2022. See SEC Proposes Cyber Risk Management and Attack Reporting Requirements, March 2022 Update. In addition, the Commission plans to adopt final rules to enhance disclosure regarding special purpose acquisition companies (SPACs) and regarding corporate share repurchases before the end of April. Finally, a proposal to expand human capital management disclosure is scheduled to be published for comment by May 1.
Although the target action dates are not mandatory (and are frequently missed), the Reg Flex Agenda provides insight into the SEC’s regulatory priorities. The most significant item on the current agenda is climate change disclosure. While the action deadline has slipped from October 2022 to April 2023, it is clear that completion of this project remains a top SEC priority. Public companies and their audit committees should consider what systems and control changes would be required to implement these new requirements. See Many Companies Plan to Invest in ESG Reporting During 2023 in this Update.