#SECGuidance

"SEC Guidance" refers to the guidance issued by the United States Securities and Exchange Commission (SEC). This guidance is not strict rules, but interpretations or recommendations that help companies understand how to comply with financial laws and regulations.

How does it work?

Purpose: The SEC issues guidelines to clarify how existing laws should be applied in new or complex situations. For example, with emerging topics such as cryptocurrencies, cybersecurity, or environmental disclosures (ESG), the SEC may publish guidelines to inform companies what and how to report.

Not legally binding, but...: Although it is not mandatory to follow this guidance as if it were a law, many companies do because:

The SEC can use that guidance as a basis for audits or sanctions.

Ignoring it may be considered negligent in an investigation.

Types of Guidance:

Interpretative Releases: Explain how the SEC interprets certain laws.

Staff Accounting Bulletins (SABs): Accounting guidelines issued by SEC staff.

No-Action Letters: Responses to companies that ask whether a specific action would violate a rule.

Compliance and Disclosure Interpretations (CDIs): Frequently asked questions about financial disclosure and compliance.

Practical application: Companies use it to ensure that their financial reports, risk disclosures, or quarterly/annual reports are in line with SEC expectations and avoid penalties.

If you want a real example of specific guidance (for instance, on cryptocurrencies or cybersecurity), I can show you that too. Are you interested in any?