SEC Raises Disclosure Exemption Threshold On Certain Compensatory Benefit Plans

The SEC adopted an amendment that will raise the disclosure threshold for non-reporting companies that offer securities to employees and other service providers through compensatory benefit plans. The amendment will become effective on the date of its publication in the Federal Register.

The SEC is raising the threshold in accordance with the Economic Growth, Regulatory Relief and Consumer Protection Act. Under Rule 701, certain issuers offering compensatory benefit plans are currently exempt from providing risk-factor disclosures and financial statements to investors, provided the aggregate sales price or amount of securities sold during any 12-month period does not exceed $5 million. The cap now will be increased to $10 million.