SEC Announces 'Quick-Fix' Disclosure Reforms
As the first step in a comprehensive program of accounting reforms, the Securities and Exchange Commission (SEC) has announced it intends to release proposed rules for expanded disclosures.
The proposed rules will:
- Provide accelerated reporting by companies of transactions by company insiders in company securities, including transactions with the company.
- Accelerate filing by companies of their quarterly and annual reports.
- Expand the list of significant events requiring current disclosure on existing Form 8-K. Such events could include changes in rating agency decisions, obligations that are not currently disclosed and lock-out periods affecting employee stock-ownership plans.
- Add a requirement that public companies post their Exchange Act reports on their web sites at the same time they are filed with the SEC.
- Require disclosure of critical accounting policies in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of annual reports.
SEC Chairman Harvey Pitt said, "These steps will provide significant improvements quickly while other proposals are considered. We will be working on our own and together with Congress, the President's Working Group, companies, investor groups and other interested participants. We anticipate further reform proposals covering financial reporting and disclosure requirements, accounting standard setting, regulation of the auditing process and profession and corporate governance."
Details of the proposed rules are available on the SEC's web site.