The Securities Exchange Commission voted unanimously over the weekend to propose regulation that would increase transparency between investors and public companies about short-term borrowing arrangements. The SEC wants companies to disclose short-term transactions as they happen instead of the current reporting standard where the info is delivered at the end of the period. "As the Commission has long advised, disclosure about liquidity and capital resources is critical to assessing a company's prospects for the future, and even the likelihood of its survival," said SEC chairman Mary Schapiro. "Investors would be better able to evaluate the company's ongoing liquidity and leverage risks." Short-term borrowing is a process companies use to fund certain, timely operations and involve loans that generally mature in a year or less. They come in many forms including commercial paper, repurchase agreements, letters of credit, promissory notes and factoring. Due to their short-period nature, a company's use of this kind of financing can fluctuate significantly during a reporting period. The SEC said some businesses use a technique called "window dressing" to favorably portray their use of these funds and eliminate reported debt. Under the proposed regulation, a company would have to provide quantitative information for each type of short-term borrowing it uses, including the amount outstanding at the end of the reporting period and the weighted average interest rate on those borrowings, the average amount outstanding during the period and the weighted average interest rate on those borrowings, and the maximum amount outstanding during the period. Along with the data, the rules require context to be given as well -- a general description of the short-term borrowings arrangements included in each category and the business purpose of those arrangements, the importance to the company of its short-term borrowings arrangements to its liquidity, capital resources, market-risk support, credit-risk support or other benefits, the reasons for the maximum reported level for the reporting period. Financial and non-financial institutions would be governed differently. The former would be required to provide averages calculated on daily average basis and the latter would be permitted to calculate averages using an averaging period. All disclosures would be outlined in the Management's Discussion and Analysis of Financial Condition and Results of Operation (MD&A) section of a company's quarterly and annual reports. The Commission also voted to issue an interpretive release that will provide guidance about existing requirements for MD&A disclosure about liquidity and funding. The announcement was made one day after the SEC defended its stance to refrain from disclosing certain information to companies under the Freedom of Information Act at a House hearing. Write to Christine Ricciardi.