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2515 Eligibility Conditions and Disclosure Requirements
us SEC - Financial Reporting Manual
2515.1 Summarized Eligibility Conditions and Disclosure Requirements - Set forth below are tables summarizing the main features of S-X 3-10 and S-X 13‑01. These tables are only a summary of certain requirements contained in the rules and regulations; they are not a substitute for the rules and regulations. Refer to the rules for the full requirements and to the description of those requirements in the March 2020 Amendments.
2515.2 Eligibility Conditions - The following table summarizes the eligibility conditions in S-X 3-10 that, if all have been satisfied, permit the omission of the separate financial statements of a subsidiary issuer or guarantor:
Eligibility Condition | Description | Rule Reference | |
Parent Company Financial Statements | Consolidated financial statements of the “parent company,” as defined at S-X 3-10(b)(1), have been filed. | ||
Consolidated Subsidiary | The subsidiary issuer or guarantor is a consolidated subsidiary of the parent company. | ||
Eligible Issuer and Guarantor Structure | The issuer and guarantor structure must match one of the eligible issuer and guarantor structures. See Sections 2515.4 and .5 below for additional information. | ||
Supplemental Financial and Non-Financial Disclosures | Parent company provides the supplemental financial and non-financial disclosures specified in S-X 13‑01. |
2515.3 Non-Financial and Financial Disclosures - The following tables summarize the supplemental non-financial and financial disclosures that, to the extent material, must be provided by the parent company. Refer to Section 2520 below for additional information on the application of these requirements.
The parent company may provide the disclosures in its consolidated financial statements and related footnotes or, alternatively, in MD&A. If a parent company elects to provide the disclosures in its audited financial statements, the disclosures must be audited. If not otherwise included in the consolidated financial statements or in MD&A, the parent company must include the disclosures in its prospectus immediately following “Risk Factors,” if any, or otherwise, immediately following pricing information described in Item 105 of Regulation S-K [S-X 13-01(b)].
Non-Financial Disclosure Requirement | Description | Rule Reference
| |
Non-Financial Disclosures | Disclosures about the following:
| ||
Disclosure of facts and circumstances specific to particular issuers and guarantors that are beyond what is specifically required in S-X 13-01(a)(1) through (3) may be necessary (see “Additional Information Required to be Disclosed” section below). | |||
Exhibit Listing Each Subsidiary Guarantor, Issuer, or Co-Issuer | List of each of the parent company’s subsidiaries that is a guarantor, issuer, or co-issuer of guaranteed securities registered or being registered that the parent company issues, co-issues, or guarantees. | Exhibit 22 (Item 601(b)(22) of Regulation S-K) |
Financial Disclosure Requirement | Description | Rule Reference | |
Summarized Financial Information | Summarized financial information, as specified in S-X 1-02(bb)(1), which includes select balance sheet and income statement line items, for each issuer and guarantor. Disclosure of additional line items of financial information beyond what is specified in S-X 13-01(a)(4) may be necessary (see “Additional Information Required to be Disclosed” section below). | ||
Basis of Presentation Note | An accompanying note that briefly describes the basis of presentation. | ||
Transactions with and Balances Due To / From Related Parties and Non- Obligated Subsidiaries | An issuer’s or guarantor’s amounts due from, amounts due to, and transactions with non-obligated subsidiaries and related parties must be presented in separate line items. | ||
Combined Basis Presentation | The summarized financial information of each issuer and guarantor consolidated in the parent company’s consolidated financial statements is permitted to be presented on a combined basis with the summarized financial information of the parent company. However, if information provided in response to disclosures specified in S-X 13- 01 (e.g., one of the non-financial disclosures) is applicable to one or more, but not all, issuers and guarantors, separate disclosure of summarized financial information for the issuers and guarantors to which the information applies is required. In limited circumstances (i.e., where the separate financial information applicable to those issuers and/or guarantors can be easily understood), narrative disclosure may be provided in lieu of such separate summarized financial information. | ||
Elimination of Certain Intercompany Balances and Transactions | Intercompany balances and transactions between issuers and guarantors whose information is presented on a combined basis must be eliminated in the financial disclosures. | ||
Exclusion of Non-Obligated Subsidiary Information | The summarized financial information of issuers and guarantors must exclude subsidiaries that are not issuers or guarantors, even if an issuer or guarantor would otherwise consolidate such non-issuer and non-guarantor subsidiaries. An issuer’s or guarantor’s investment in a subsidiary that is not an issuer or guarantor shall not be presented. | ||
Periods to Present | The summarized financial information must be provided as of and for the most recently ended fiscal year and year-to-date interim period, if applicable, included in the parent company’s consolidated financial statements. | ||
Non-Exclusive Scenarios Permitting Omission of Summarized Financial Information | The summarized financial information may be omitted on the basis that it is not material if one of the four non-exclusive scenarios in S-X 13-01(a)(4)(vi) is applicable and the related scenario is disclosed. See Section 2520.3 for a discussion of the second non-exclusive scenario. | ||
Additional Information Required to be Disclosed | Disclose any financial and narrative information about each guarantor if the information would be material for investors to evaluate the sufficiency of the guarantee, and disclose sufficient information so as to make the financial and non-financial information presented not misleading. | ||
Recently-Acquired Subsidiary Issuers and Guarantors | Disclose pre-acquisition summarized financial information specified in S-X 13-01(a)(4) for recently-acquired subsidiary issuers and guarantors in a Securities Act registration statement filed in connection with the offer and sale of the guaranteed security if the parent company has acquired a significant “business” after the date of its most recent balance sheet included in its consolidated financial statements and that acquired business and/or one or more of its subsidiaries are obligated as issuers and/or guarantors. See Section 2530 below for additional information. |
2515.4 Eligible Issuer and Guarantor Structures Condition – Parent Company Obligation is Full and Unconditional – The ability to provide supplemental financial and non-financial disclosures in lieu of separate subsidiary issuer and guarantor financial statements is only available when the parent company’s obligation is full and unconditional. The parent company’s role as issuer, co-issuer, or full and unconditional guarantor with respect to the guaranteed security determines whether the issuer and guarantor structure is eligible. See eligible structures at S-X 3-10(a)(1)(i) and (ii).
A guarantee is “full and unconditional,” if, when an issuer of a guaranteed security has failed to make a scheduled payment, the guarantor is obligated to make the scheduled payment immediately and, if it does not, any holder of the guaranteed security may immediately bring suit directly against the guarantor for payment of all amounts due and payable. [S-X 3-10(b)(3)].
2515.5 Subsidiary Guarantors - The categories of eligible issuer and guarantor structures at S-X 3-10(a)(1)(i) and (ii) do not refer to subsidiary guarantors. Although one or more other subsidiaries of the parent company may guarantee the security, the eligibility of an issuer and guarantor structure depends on the role of the parent company as issuer, co-issuer, or full and unconditional guarantor with respect to the guaranteed security. Separate financial statements of consolidated subsidiary guarantors may be omitted for each issuer and guarantor structure that is eligible if the other conditions of S-X 3-10 are met.
Despite not affecting whether the issuer and guarantor structure is eligible, the role of subsidiary guarantors and nature of their guarantees affect what disclosure is required. For example, subsidiary guarantors are required to be identified pursuant to S-X 13-01(a)(1), and disclosure of the terms and conditions of the guarantees is required by S-X 13-01(a)(2), which includes but is not limited to any limitations and conditions of a subsidiary’s guarantee, whether the guarantee is joint and several with other guarantees, and any guarantee release provisions. Further, separate disclosure of summarized financial information applicable to subsidiary guarantors to which such disclosures apply is required by S-X 13-01(a)(4)(iv).
This is a work of the U.S. Government
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