Quantitative disclosures of market risk in the SEC release

During 1994, significant changes in interest rates, foreign currency exchange rates, commodities prices and equity prices resulted in significant losses from derivative instruments. Addressing issues stemming from the losses, the SEC proposed in December 1995 (SEC 1995) and issued in January 1997 (SEC 1997) new disclosure rules. SEC (1997) represents an initial step by the Securities & Exchange Commission to improve disclosures about market risk. It is anticipated that the SEC will continue to consider how best to address disclosure issues relating to market risk sensitive instruments. In this regard, SEC (1997) announced the Commission's intention to reconsider the effectiveness of the new rules, as well as the need for additional proposals, after each of the following: 1. issuance of new accounting standards for derivatives by the FASB, 2. development in the marketplace of new generally accepted methods of measuring market risk, and 3. a period of 3 years from the effective date of the quantitative market risk disclosure requirements.