SEC Agrees to Phase in Faster And Fuller Reporting Rules

In its first rule-making session this year with a full complement of five commissioners, the Securities and Exchange Commission (SEC) agreed to expand and accelerate the reporting requirements for large public companies. Smaller companies caught a break. The SEC decided to phase in certain requirements over time and according to the size of the company, thereby allowing smaller companies to grow into the faster and fuller reporting requirements.

After the meeting, the SEC published a summary of the key changes and promised that detailed releases would be available soon on its Web site. The key changes:

  • Quarterly reports on Form 10Q and annual reports on Form 10K must generally be filed faster than before, with certain exceptions for newer and smaller issuers. The deadlines become increasingly earlier over the next three years. For example, the due date for annual reports stays at 90 days this year, moves up to 75 days next year, and changes to 60 days after that.

  • The certifications by chief executive officers and chief financial officers that are required under the Sarbanes-Oxley Act will apply to public companies of all sizes, both U.S. and foreign issuers. In addition to swearing to the accuracy and completeness of their companies' reports, officers will also need to make representations about the companies' disclosure controls and procedures. The comments will cover changes in internal controls and corrective actions to address significant deficiencies and weaknesses.

  • Insider trading reports will need to be filed within two days.

  • Companies will need to disclose in their annual reports on Form 10K whether or not their periodic reports are made available free of charge on their Web sites as soon as reasonably practicable after the materials are filed with the SEC.

Download Release No. 34-46421, "Ownership reports and Trading by Officers, Directors and Principal Security Holders" and Release No. 33-8124, "Certification of Disclosure in Companies' Quarterly and Annual Reports."

-Rosemary Schlank

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