Updates on the SEC’s Perspective

Exemptions Considered on SOX Requirements for Smaller Companies - An amendment for companies smaller than $75 million in market capitalization was modified to permanently exempt 404(b) requirements under the Sarbanes Oxley Act.  This amendment will now be included in a bill combined with six other regulatory reform bills for vote by the full House of Representatives.  Originally, this amendment looked to provide relief for small cap companies until June 2011 to comply with 404(b).  Just recently, the SEC elected to postpone the requirement for companies until June 15, 2010.

In late October 2009, the House Financial Services Committee drafted this amendment along with other efforts which would provide relief for smaller public companies.  Another proposal would have exempted companies with a market cap of less than $700 million from the 404(b) requirements under SOX, until the Securities and Exchange Commission puts forth scaled compliance requirements for small and medium sized public companies.  This exemption would include those accelerated filers with market caps of between $75 million and $700 million which have already been compliant since June 2004. In early November 2009, the amendment was withdrawn by its originator, Rep. John Adler (D-NJ). 

SEC to Provide More Clarity on IFRS Roadmap - At a recent accounting conference in New York, SEC Chief Accountant James Kroeker provided an update on the status of the international financial reporting standards (IFRS) roadmap in the United States.  Referring to the SEC’s self-imposed deadline to provide a finalized plan this fall, he stated that “fall ends Dec. 21.”  Kroeker was unable to give a specific date on which the SEC would meet to finalize the roadmap.  At the G-20 Summit in Pittsburgh on Sept. 24-25, 2009, world leaders demanded that global standard setters “achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.” Kroeker’s presentation took place at a conference co-sponsored by the American Institute for Certified Public Accountants and International Accounting Standards Committee Foundation.

House Constituents Consider Changes Allowing Public Companies to Report Only Twice a Year - Rep. John Campbell, (R-CA) recently proposed legislation that would modify current SEC reporting guidelines to require public companies to file financial reports twice a year.  The provision aims at eliminating companies from short sighted results pushed by quarterly earnings results.  This measure was rejected, however, and House Financial Services Committee Chairman Barney Frank said that a hearing will soon be held to re-consider the guideline.