SEC Issues Year 2000 Guidance

By David M. Nadler

The Securities and Exchange Commission ("SEC") issued updated Staff Legal Bulletin No. 5 on January 12, 1998, expanding its earlier guidance concerning the obligation of publicly held companies and investment advisors to disclose anticipated costs, problems, and uncertainties associated with the Year 2000. The January bulletin revises a prior SEC bulletin released in October, 1997.

By law, publicly held corporations are required to disclose any information that materially impacts the value of its stock or that may affect the accuracy of reported financial information. The revised bulletin emphasizes the obligation of publicly held companies to continually review the need for disclosures related to corporate plans to identify and correct Year 2000 problems. The SEC bulletin advises that disclosure of anticipated remediation costs, as well as possible consequences of an untimely resolution of Year 2000 issues, may be required by SEC registration statements