Are You Ready to Disclose Emerging Risks in Your 2025 SEC Filings?

The SEC is laser-focused on emerging risks! Audit Committees, CFOs, and CAOs—this is your heads-up to get ahead of the curve. The SEC expects detailed, investor-useful disclosures in your MD&A, risk factors, and business description sections. Here’s what’s on their radar:

• Artificial Intelligence (AI): AI’s role in your operations and future performance must be clear. Claims need a reasonable basis—no fluff. Highlight risks like cybersecurity breaches, data privacy violations, discrimination concerns, intellectual property disputes, and governance gaps.

• Crypto Assets: Transparency is key. Disclose material risks tied to pending or enacted regulations—think legislation impacting crypto holdings or transactions.

• Other Hotspots: Depending on your industry, supply chain disruptions, China-based issuer challenges, commercial real estate shifts, or banking sector volatility could be material. Tailor your disclosures accordingly.

Generic boilerplate won’t suffice. Investors want specifics: How do these risks hit your bottom line? What’s your mitigation plan? Robust risk management and governance disclosures are critical to back up your narrative.

Stay tuned for more insights on navigating 2025’s reporting landscape.