SEC Releases Proposal to Modernize Reporting Rules
On April 11, 2002, the Securities and Exchange Commission (SEC) approved the release for public comment of proposed rules that would modernize and improve the timeliness of its system of corporate disclosures. The proposed changes recognize the importance of the Internet and move companies closer to real-time reporting. Some see these changes as long overdue. Despite widespread improvements in information technology, the shorter filing deadlines proposed by the Commission would represent the first change in more than 30 years.
The proposed changes would:
- Shorten the filing deadlines for annual reports from 90 to 60 days after a company's fiscal year end.
- Shorten the filing deadlines for quarterly reports from 45 to 30 days after a quarter's end.
- Require companies to disclose in their annual reports whether they provide access to their annual, quarterly and current reports on Form 8-K on their websites. If a company does not provide website access to its reports, it would have to state the reasons why it does not provide such access.
- Require certain registrants to report insider transactions involving the company's equity securities more quickly on Form 8-K.
"Thirty years ago," explains SEC Chairman Harvey Pitt, "companies were still dependent on paper and pencil, adding machines, carbon paper and the U.S. mails to prepare and file their reports with us." Since then, Chairman Pitt says, "The revolution in information technology and communications ... has both increased investors' demand for, and provided the means for companies to supply, corporate disclosures on a more real-time basis."
Read SEC Release No. 33-8089, Acceleration of Periodic Report Filing Dates and Disclosure Concerning Website Access to Reports, and Release No. 33-8090, Form 8-K, Disclosure of Certain Management Transactions. Send comments to the SEC.