SEC Advisory Committee Releases Sarbanes-Oxley Recommendations

by Glen Shapiro, LawAndTax-News.com, New York

27 April 2006

The US Securities and Exchange Commission's Advisory Committee on Small Public Companies has recommended reforms to the Sarbanes-Oxley corporate governance legislation, designed to reduce the regulatory burden on smaller companies.

In a 18-3 vote, the advisory committee agreed to a final set of recommendations for submission to the SEC. Changes proposed by the Committee include relief from management and external auditor attestation requirements for companies defined as:

• Small cap or having market caps of less than $787 million with less than $10 million in product revenues;
• Microcap, or the bottom 1 percent in market cap, which usually fluctuates between $125 million and $128 million, and companies with less than $125 million in revenues.

Additionally, the committee recommended relief for small caps with a market cap no higher than $787 million with less than $250 million in revenues.

Commenting on the Committee's recommendations, SEC Chairman, Christopher Cox observed that:

"The Advisory Committee’s members and staff have performed an extraordinarily valuable public service in so thoroughly and professionally setting forth the views of America’s smaller public companies. I congratulate the Committee, its co-chairs, and every member for their hard work and valuable advice."

"The Committee’s Final Report includes a compelling affirmation of the Sarbanes-Oxley Act of 2002 and the improved corporate governance and accountability the Act provides."

"The report’s 33 recommendations reflect the culmination of a thoughtful, comprehensive and open process that included more than a dozen public meetings across the country, testimony from 42 expert witnesses, and countless hours of study and deliberation over the past 13 months."

"The Commission will carefully consider these and other recommendations as we go forward. For now, as we receive this report, the Commission can say with honest appreciation: thank you for a job well done."

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