SEC Chairman Atkins Highlights State Competition And Disclosure Reform

In remarks delivered on February 17, 2026, at the Texas A&M School of Law Corporate Law Symposium, SEC Chairman Paul Atkins highlighted aspects of his agenda that are of particular interest to public companies and companies considering going public. His speech focused on two central themes:

• Competition among the States for corporate domestication; and
• Potential reform of SEC disclosure requirements.

The Chairman's remarks reinforce a meaningful deregulatory shift that is grounded in materiality and simplification of public company disclosures.

State Competition

Chairman Atkins emphasized that competition among firms, markets, and States “is the animating force behind a system that has produced more prosperity than any other in human history.” He pointed to Texas as an example of a State seeking to attract companies as a destination for corporate domestication by enacting legislation seeking to reduce politicization and abusive litigation. In particular, he highlighted Texas's 2025 enactment of Senate Bill 29, which limits fee awards in disclosure-only suits and gives companies greater control over forum selection and adjudication of internal affairs claims.

Mandatory Arbitration: SEC Reverses Course

Perhaps most consequential for companies that are considering an IPO, Chairman Atkins described the SEC's action to reverse its prior informal practice of not taking registration statements effective when the company's organization documents included mandatory arbitration provisions. In September 2025, the Commission approved a policy statement concluding that mandatory arbitration provisions are not inconsistent with the federal securities laws and specifying that the SEC Staff would no longer refuse to accelerate the effective date of a company's registration statement based on the presence of mandatory arbitration provisions in the company's organizational documents.

• Critical caveat: State law controls. Delaware prohibited mandatory arbitration for federal securities law claims last summer. Companies must therefore assess their state of incorporation before adopting such provisions. As a result, mandatory arbitration clauses may become a meaningful differentiator in state-of-incorporation decisions—particularly for those IPO candidates evaluating Delaware versus alternative jurisdictions.

Regulation S-K Reform: A Materiality Reset

Chairman Atkins has been discussing disclosure reform for several months, and these remarks provide more details regarding area of concern with the disclosure requirements. He reiterated his vision of returning the SEC's disclosure regime to its original purpose: protecting investors with the least possible interference with honest business.

He identified two guiding principles:

1. Disclosure requirements should be rooted in financial materiality; and
2. Requirements should be scaled to company size and maturity.

This framing suggests a broad reconsideration of Regulation S-K and other reporting rules and forms, rather than just incremental adjustments to line-item disclosure requirements.

Executive Compensation Disclosure.  The Chairman pointed to Item 402 of Regulation S-K as emblematic of disclosure complexity, outlining three reform priorities:

1. Rationalizing Scope.  Current rules require detailed compensation disclosure for up to seven “named executive officers.” Commenters have questioned whether disclosure beyond the CEO is material to investors. Chairman Atkins indicated that the SEC should reconsider the number of named executive officers, with a narrowing of the scope of the disclosure meaningfully reducing the length of proxy statements and the drafting burden imposed on companies.
2. Simplifying Pay-Versus-Performance.  The pay-versus-performance rule was described at the SEC's recent roundtable as a complex calculation that is difficult both to prepare and to interpret— as Goodwin's Dave Lynn described at the roundtable, “disclosure written by economists for economists.” Some commenters have noted that the rule has required additional explanatory disclosure to address investor confusion. The Chairman indicated an interest in simplification so that compensation disclosure is more intelligible to reasonable investors and does not require layered explanations.
3. Modernizing Perks Disclosure.  When the Commission last addressed executive security in 2006, it treated security at an executive's residence or during personal travel as a “perk.” Commenters have argued that in today's environment, comprehensive 24/7 security is increasingly a business necessity. The Chairman signaled that modernization of perks disclosure—particularly relating to executive security—warrants consideration.

“Regulation by Shaming”

Chairman Atkins criticized certain “comply or explain” governance disclosures as effectively operating as mandates for corporate governance practices. He characterized this approach as “regulation by shaming,” suggesting that, absent a Congressional directive, the SEC's role with respect to disclosure rooted in materiality—not enforcement of evolving governance best practices through disclosure pressure.

Risk Factors: Rethinking Purpose and Length

Risk factors have become among the longest sections of Form 10-Ks. Although the SEC amended Item 105 of Regulation S-K in 2020 to require summaries for risk factor disclosure exceeding fifteen pages, many companies retained lengthy disclosures and the added summaries in addition to that lengthy disclosure. The Chairman posed a threshold question: are risk factors primarily investor communication tools—or litigation shields? He floated two conceptual approaches:

• Maintaining a set of broadly applicable risks published separately from annual reports that companies could reference; or
• Adopting a rule-based safe harbor from liability stating that failure to disclose impacts from widely publicized events affecting most companies would not constitute material omissions.

Conclusion

The remarks of Chairman Atkins provide more insight into the SEC's developing deregulatory agenda that is grounded in materiality and simplification.

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