5 Key Takeaways from Nasdaq's Comment Letter on Reg. S-K Reform

Every public company in America operates under a detailed set of federal rules that govern what they must disclose, how they must disclose it, and when. That rulebook is called Regulation S-K, and for many companies, it represents one of the most burdensome facts of life as a public company.

Since its core provisions were first adopted in 1982, Reg. S-K has been amended repeatedly, with new requirements added by successive administrations in response to market crises, legislative mandates, and shifting policy priorities. Comparatively few requirements have ever been removed. The result, as SEC Chairman Paul Atkins has put it, resembles a Frankenstein monster: a patchwork of rules that has grown well beyond its original purpose.

Now the SEC is calling for a comprehensive review — and Nasdaq is answering. Here's what you need to know about what Nasdaq is recommending, and why it matters.

1. Nasdaq is answering the SEC's call to fix a disclosure system that has grown unwieldy for decades

Reg. S-K has been amended repeatedly since it was first adopted in 1982, but rarely removing old ones. Public companies consistently cite it as one of the worst aspects of being public. Nasdaq, drawing on its unique position as both a regulated exchange and a public company itself, is providing recommendations to the SEC to help identify what can be reformed, streamlined, or eliminated, and to make the case that a better disclosure regime is long overdue.

In a newly submitted comment letter to the Commission, Nasdaq offers approximately 40 distinct reform recommendations spanning executive compensation disclosure, periodic reporting, cybersecurity, risk factors, and more. The letter reflects direct input from Nasdaq's listed companies across industries, sizes, and stages of development, all of whom reported that the existing regime imposes significant costs with diminishing returns for investors.

2. Reform is a win-win: lower costs for companies, clearer information for investors

Reg. S-K reform is about improving the quality of information that reaches investors, not just reducing paperwork. Today's disclosure regime produces enormous volumes of boilerplate reports that clutter the picture, making it harder for investors to find what actually matters.

By cutting low-value, duplicative requirements, Nasdaq's recommendations aim to reduce compliance costs for companies and direct savings back to the bottom line, while simultaneously making disclosure more focused and decision-useful for investors.

A healthier disclosure framework also strengthens the long-term appeal of public markets, encouraging more companies to list publicly and giving everyday investors broader access to growth opportunities.

“There are some really practical, pragmatic things that we can do as a nation to make it so that that path to the public markets is a smoother one,” Nasdaq Chair and CEO Adena Friedman said during a conversation last year with Atkins. She explained that doing so would spur companies to seek access to the “billions of investors who come from around the world to invest in this great country, to invest in these great companies and allow more and more of the people within this country to be engaged and involved in the economy, to allow them to benefit from the growth of the economy and everything we do here.”

3. Focused materiality: give companies clear principles as opposed to prescriptive checklists

One of Nasdaq's core reform themes is what the letter calls "focused materiality." Securities law requires companies to disclose what's material to investors, but when rules try to implement that principle through long lists of specific items, companies feel compelled to address every item on the list regardless of whether it applies to them.

This drives up the page count of disclosures, confusing investors, overburdening compliance teams, and dissuading companies from going public. Nasdaq is recommending replacing those exhaustive checklists with concise, principles-based guidance that identifies the key concepts companies should consider, giving companies real discretion to exercise judgment while reducing the fear of SEC comment letters or foot-fault litigation that pushes so many toward over-disclosure.

4. Right-sizing rules: modernize for the internet age and scale for smaller companies

Many Reg. S-K requirements were written for a world where investors couldn't look up a stock price, a dividend history, or a company's exchange listing without a physical filing in hand. Today, that information is freely available online in seconds.

Nasdaq is recommending eliminating rules that have been rendered obsolete by near-universal internet access, and updating the framework to allow companies to hyperlink to existing disclosures rather than repeat them.

Equally important: smaller and newly public companies disproportionately bear the cost of compliance. Nasdaq recommends true scaling of the disclosure requirements so that the burden is proportional to company size, protecting emerging companies that are most critical to a vibrant public market pipeline.

5. Eliminate duplicative and misleading disclosures that don't help investors

A significant portion of today's disclosure burden comes from requirements that overlap with other filings or produce information that is inherently misleading.

For example, much of the executive compensation detail required in proxy statements duplicates what is already reported in near-real time through Section 16 filings (e.g., Forms 4), which are freely available online. Meanwhile, some rules require companies to calculate figures, like change-in-control payouts, using arbitrary assumptions that virtually guarantee the number will be wrong when and if payouts occur.

Nasdaq recommends eliminating these sorts of redundant requirements and replacing misleading calculated disclosures with the formulas and frameworks that actually give investors useful information.

Now that the comment period is closed, the SEC will review the comment letters, including Nasdaq’s, and develop proposed reforms. If and when the SEC decides to propose specific changes to Reg. S-K, they will release a proposed rulemaking that will likely also be followed bya public comment period and then final rules.