Today, the SEC's Advisory Committee on Smaller Public Companies announced Exposure Draft of its Final Report. The 149-page report makes thirty-two recommendations, divided into two tiers. Included in the first tier are "primary recommendations." Some of these include:
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Establishing "a new system of scaled or proportional securities regulation for smaller public companies based on a stratification of smaller public companies into two groups, microcap companies and smallcap companies;"
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Exempting (at least for now) microcap companies with less than $125 million in annual revenue and to smallcap companies with less than $10 million in annual product revenue from Section 404 of the Sarbanes-Oxley Act and external auditor involvement; and
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Developing a “safe-harbor” protocol for accounting for transactions that would protect well-intentioned preparers from regulatory or legal action when the process is appropriately followed.
Comments are due on April 3, 2006.
I, for one, like the direction the SEC is headed. More and more small cap and microcap companies are going public--on foreign exchanges--to avoid the stiffer regulations developing in the US.
Posted by: Devin Thorpe | March 6, 2006 7:47 PM | Permalink to Comment