SEC Proposal on Short-Term Borrowing Disclosure by Public Companies

The Securities and Exchange Commission voted to propose measures that would require public companies to disclose additional information to investors about their short-term borrowing arrangements. The proposals would require “a registrant to provide, in a separately captioned subsection of Management’s Discussion and Analysis of Financial Condition and Results of Operations, a comprehensive explanation of its short-term borrowings, including both quantitative and qualitative information.”

The proposed rules are aimed to enable investors to better understand whether amounts of short-term borrowings reported at the end of reporting periods are consistent with amounts outstanding throughout the reporting periods. From the FAQs it sounds like the proposal is intended to attack repo transactions.