Sec Proposes New Derivative Disclosures

Responding to a surge in investment losses by companies, the Securities and Exchange Commission on Thursday proposed that public corporations supply detailed information on the potential risks of their holdings in complex financial derivatives.

The details, to be included as footnotes in companies’ financial reports, are intended to give shareholders a clearer idea of the risks from derivatives.

These arcane securities, which are derived from, or based on some underlying market value, have produced unexpected losses at Procter & Gamble Co., Gibson Greetings Inc. and other big companies in the past two years.