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Financial Reporting Alert 10-2, SEC Issues Technical Corrections to Proxy Disclosure Enhancements

February 24, 2010

Background

On December 16, 2009, the SEC approved Release No. 33-9089, Proxy Disclosure Enhancements (the “Rule”), which requires disclosures in proxy and information statements. Deloitte’s Center for Corporate Governance has issued two Hot Topic articles summarizing the requirements of the SEC’s final rule on enhanced proxy disclosures and information to consider in drafting the disclosures.

One of the Rule’s requirements is that for shareholder meetings held on or after February 28, 2010, registrants must report all shareholder voting results in Item 5.07 of Form 8-K rather than in Item 4, “Submission of Matters to a Vote of Security Holders,” of Form 10-Q or Form 10-K within four business days of the annual or special meeting at which the vote was held.

The Rule will become effective on February 28, 2010, and also affects Forms 10-K and 10-Q filed on or after February 28, 2010. Also see the SEC's Compliance and Disclosure Interpretations on how the effective date applies to certain SEC filings.

Technical Corrections to Proxy Disclosure Enhancements

On February 23, 2010, the SEC made technical corrections to the Rule in Release No. 33-9089A (the “Release”). The technical corrections are also effective February 28, 2010. The changes included the following:

  • The Rule originally required that the other Items would move up numerically (i.e., in Form 10-K, Item 5 in Part II would have become Item 4). However, the Release amended Forms 10-K and 10-Q by removing and reserving Item 4 so that the Items in Forms 10-Q and 10-K will retain their current numbering (i.e., Item 5 of Part II will remain Item 5; Management’s Discussion and Analysis of Financial Condition and Results of Operations will remain Item 7; and so forth). This was done to prevent confusion regarding references to the Item numbers in existing professional literature.
  • In addition, the Release made three corrections to Form 8-K, including the addition of an instruction, which corresponds to an instruction contained in Forms 10-Q and 10-K, that allows certain wholly owned subsidiaries to omit the disclosure of shareholder voting results.

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