As part of its efforts to restore confidence in the capital markets, the U.S. Securities and Exchange Commission (SEC) tentatively approved several new curbs aimed at the types of reporting and trading abuses involved in recent accounting scandals. The curbs will be formalized in releases and exposed for a 30-day comment period.

The proposed rule-changes address four main areas:

• Use of non-GAAP financial information. New "Regulation G" will prohibit material misstatements or omissions when using non-GAAP financial information (information not prepared in accordance with generally accepted accounting principles). To help prevent misunderstandings, reconciliations to comparable GAAP financial measures will be required.

• Earnings releases.Companies will be required to make Form 8-K filings when they issue earnings releases or any other announcements disclosing material non-public financial information about completed annual or quarterly fiscal periods.

• Off-balance sheet arrangements, contractual obligations and contingent liabilities and commitments. The SEC will set forth specific types of disclosures about these off-balance sheet items that must be provided in the "Management's Discussion and Analysis" (MD&A) portions of corporate reports. Companies will be required to disclose these off-balance sheet transactions, if the likelihood of the transaction having a material effect on the company is more than "remote."

• Insider trading during pension fund blackout periods. Officers and directors will be prohibited from engaging in equity transactions during a pension plan blackout period that prevents plan participants and beneficiaries from engaging in similar transactions.

The full text of detailed releases concerning each of these items will be posted to the SEC Web site shortly. Due to deadlines set by the Sarbanes-Oxley Act, the expectation is that rule changes will become effective as soon as practicable after the Commission has a chance to digest and consider the comments received on the proposed rules.