2.4 Application to Various Types of Issuers
Rules 3-10 and 13-01 apply to several categories of issuers, including FPIs, SRCs,
and issuers offering securities under Regulation A. In certain circumstances, Rules
3-10 and 13-01 also apply to the financial information of third parties provided by
issuers of asset-backed securities. The sections below discuss specific
considerations.
2.4.1 Foreign Private Issuers
FPIs are required to comply with Rules 3-10 and 13-01 in Form
20-Fs and on registration statements such as Forms F-1 and F-3. However, since
FPIs are not required to issue quarterly reports, they are only required to
provide alternative financial disclosures for interim periods in registration
statements.
FPIs should consider IFRS® Accounting Standards or their home country
GAAP, as applicable, when evaluating the eligibility conditions for providing
the alternative disclosures discussed in Section 2.2 (e.g., IFRS 10, instead of ASC
810, for the consolidated subsidiary condition). Also, FPIs may provide
financial statements in accordance with U.S. GAAP, IFRS Accounting Standards, or
home country GAAP reconciled to U.S. GAAP. The alternative financial disclosures
required by Rule 13-01 may be provided on the same basis as the registrant’s
financial statements. If such information is disclosed on the basis of home
country GAAP, there is no explicit requirement for the FPI to reconcile to U.S.
GAAP, as is required for the registrant’s consolidated financial statements.
However, FPIs that apply home country GAAP should consider Rule 13-01(a)(6) and
(7), which require the registrant to disclose additional financial information
“if the information would be material for investors to evaluate the sufficiency
of the guarantee” and would provide “[s]ufficient information so as to make the
financial and non-financial information presented not misleading.” As a result,
registrants that apply home country GAAP may conclude that reconciliation of the
alternative financial disclosures to U.S. GAAP is appropriate, although it is
not explicitly required.
The SEC’s March 2020 final rule is not intended to change how an
FPI applies Regulation S-K, Item 512(a)(4), when updating financial statements
in delayed or continuous offerings. If an FPI is required to update its
financial statements with unaudited interim financial statements, the summarized
financial information required under Rule 13-01 should also be updated
regardless of whether such disclosures are included in the financial statements
or MD&A.
Note that Exhibit 17 in Form 20-F, Item 19, requires registrants
to identify each subsidiary that is a guarantor, issuer, or co-issuer of a
guaranteed debt security that the parent company issues or guarantee.
2.4.2 Smaller Reporting Companies
Rule 13-01 requires SRCs to provide the same information as
other registrants. One of the primary disclosure accommodations available to
SRCs is the ability to provide two years, rather than three, of annual financial
statements. However, because Rule 13-01 only requires reporting of the most
recent annual and interim periods, this accommodation for SRCs does not affect
the disclosures required for guaranteed debt securities.
2.4.3 Regulation A
Although Regulation A of the Securities Act exempts offerings
under a certain threshold from registration, the SEC issued clarifying
instructions to Forms 1-A, 1-K, and 1-SA that specify that Rules 3-10 and 13-01
apply to Regulation A issuers.
Regulation A, Rule 257(b),
specifies that subsidiary issuers and guarantors that are permitted to omit
their separate financial statements from Forms 1-A, 1-K, and 1-SA under Rule
3-10 are automatically exempt from the periodic and current reporting
requirements of Rule 257(b). Further, in a manner consistent with Rule 12h-5 of
the Exchange Act, a subsidiary issuer or guarantor that later ceases to satisfy
the requirements of Rule 3-10 (e.g., it ceases to be a consolidated
subsidiary of the parent company) would then be required to begin filing reports
under Rule 257(b) for the period during which it ceased to satisfy the
requirements of Rule 3-10.
Exhibit 17 in Form 1-A, Item 17, requires registrants to identify each subsidiary
that is a guarantor, issuer, or co-issuer of a guaranteed security that is
issued or guaranteed by the parent company and is qualified or being qualified
under Regulation A. This exhibit will also be required in Part II of Form 1-K,
Item 8(b), and in Form 1-SA, Item 4(b).
2.4.4 Asset-Backed Issuers
Asset-backed securities are generally fixed-income securities for which the
payments primarily depend on cash flows generated by specific underlying assets.
Issuers of asset-backed securities are required to disclose financial
information about significant obligors or guarantors of such assets. If the
obligor or guarantor is an Exchange Act reporting company and provides the
information required by Rule 13-01, this requirement may be satisfied.