Sonia Barros, assistant director, division of corporation finance, at the Securities and Exchange Commission (SEC), participated in a video interview at Nareit's REITwise: 2018 Law, Accounting & Finance Conference in Hollywood, Florida.
Giving an update on the SEC’s disclosure effectiveness project, Barros said a recent SEC action last October called for improvements to regulation S-K to streamline and improve certain items. However, “this was not the end of the SEC’s disclosure effectiveness story. At the staff level, we are still actively engaged and working on additional recommendations to the commission for further action here,” Barros said.
As for other initiatives that could impact the REIT sector, Barros said that SEC staff is working on recommendations that would help modernize and streamline real estate-related disclosures. If the commission decides to move forward with these proposed initiatives, the industry would get a chance to weigh in on the proposals before the SEC comes out with any final rules.
The SEC also came up with some accommodations last August relating to the Fixing America’s Surface Transportation (FAST) Act, which should benefit REITs, Barros noted. This would allow REITs to omit some historical financial information from draft registration statements they submit to the SEC.
The capital markets regulation authority will also consider some additional waivers to required financial information. REIT managements could send in email requests to the SEC. Requests should explain why the waiver is required and propose a solution that would meet the needs of investor protection.
Touching on waivers under rule 3-14, which relates to real estate operations, Barros explained that there is a tradeoff between allowing a company to go forward with transactions and weighing investor protection requirements.