US Securities and Exchange Commission Proposes New Short-Term Borrowings Disclosure

Originally published October 1, 2010

Keywords: SEC, MDA, MJDS, short-term borrowings,

On September 17, 2010, the Securities and Exchange Commission (SEC) unanimously approved Release Nos. 33-9143; 34-62932¹ (the Proposing Release), proposing a new, separately captioned subsection of Management's Discussion and Analysis of Financial Condition and Results of Operations (MDA) that would contain detailed quantitative and qualitative information about a registrant's short-term borrowings for annual and quarterly periods. This proposal is designed to address balance sheet "window dressing," a practice whereby some companies intentionally pay down short-term indebtedness just before the end of a reporting period so that such debt, which may be important to the company's operations, does not appear on the balance sheet. The proposed amendments would highlight shortterm financing practices throughout a period, rather than providing only a period-end snapshot. They would