Cut ‘mind numbing’ disclosures: SEC

US securities regulators told Corporate America to cut down on the needless information it discloses to investors.

I would like companies to get away from the "mind numbing" laundry list of risks they may face, said Meredith Cross, the Securities and Exchange Commission's director of corporation finance.

Companies issue thousands of pages of financial reports every year that include management's view on the upcoming year, how executives are compensated and potential risk factors. But the reports are dense and lengthy and often are littered with incomprehensible legal language.

One area that needs work is the so-called compensation and discussion analysis (CD&A), where companies discuss the policies and decisions related to executive compensation.

Shelley Parratt, the SEC's deputy director of disclosure operations said investors are frustrated by boiler plate language.

"I encourage you to figure out where to delete information," Parratt said at a Practising Law Institute conference. "The quality of your analysis is not measured by the length."

The SEC expects to soon start reviewing disclosure requirements for quarterly and annual filings. The agency wants to figure out what information should be omitted and what needs to be added.

Cross said she would like to see a place in the corporate filings where companies describe the risks they face and how they are being addressed.

She said the SEC is looking at its rules to determine whether companies are being asked to provide the "right" information.

The SEC has tried over the years to make corporate disclosures more meaningful to investors. In 2008, it adopted rules requiring mutual funds to make their prospectuses easier for investors to read, understand and access.

The agency also convened panels to try and find ways to make the so-called management discussion and analysis (MD&A) -- management's story on the reporting period and outlook -- more readable.