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.
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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