On March 1, 2017, the Securities and Exchange Commission (SEC) published proposed amendments to SEC Rule 15c2-12 [Release No. 34-80130] that would require event notices to be posted upon the incurrence of “financial obligations” or the occurrence of certain events with respect to financial obligations. The amendments would go into effect three months after adoption by the SEC of final amendments. Comments are due to the SEC within 60 days from the date of publication in the Federal Register.
Throughout the commentary in the proposing release, the SEC explains the need for the amendment by stating that the new disclosure requirements will provide timely access to “information about the current financial condition of the issuer or obligated person, including potential impacts to the issuer’s or obligated person’s liquidity and overall creditworthiness, and whether security holders could be affected.” Additionally, the SEC also states that the amendment will provide investors with timely access to “information about the creation of contingent liquidity risk and refinancing risk, including these risks’ potential impact to the issuer’s or obligated person’s liquidity and overall creditworthiness, and whether security holders have been affected.”