This Securities Briefing discusses:
This Securities Briefing is intended only as a summary of the SEC rules and releases discussed and you are encouraged to review the full text of the rules and releases.
Final SEC Rules Extending Date to Comply with Section 404
On March 2, 2005, the SEC adopted final rules extending the date that non-accelerated filers and foreign private issuers must provide the management report on internal control over financial reporting and related attestation report required by Section 404 of the Sarbanes-Oxley Act by one year. Non-accelerated filers and foreign private issuers do not need to comply with such requirements until the first fiscal year ending on or after July 15, 2006 (extended from July 15, 2005).
The SEC indicated that the extension, among other things, will allow smaller public companies additional time to consider new guidance from the Committee of Sponsoring Organizations (COSO) which has been formed to expand the existing COSO Framework as it applies to small companies. COSO is expected to issue the new guidance during the summer of 2005. Alan L. Beller, Director of the Division of Corporation Finance, commented as follows: “Given the burdens in designing and implementing Section 404 compliance for smaller and non-U.S. companies, this extension strikes the right balance. Companies should use the extension not to delay but to improve the quality of their efforts.”
Copy of Final SEC Rules Extending Date to Comply with Section 404
A copy of the final SEC rule extending the compliance date is available on the SEC’s website at www.sec.gov by selecting Final Rule: Management’s Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports of Non-accelerated Filers and Foreign Private Issuers or by going to http://www.sec.gov/rules/final/33-8545.htm.
SEC’s Temporary Postponement of the Final Phase-in Period for Acceleration of Periodic Report Filing Dates
Based on public comments, the SEC adopted final rules to postpone for one year the final phase-in of the accelerated filing deadlines for periodic reports filed by accelerated filers. As a result, the deadline for an accelerated filer to file its annual report for its fiscal year ending on or after December 31, 2004 remains at 75 days after fiscal year end and the deadline for filing its quarterly reports remains at 40 days after quarter end. Beginning with fiscal years ending or after December 31, 2005, an accelerated filer will have to file its annual report within 60 days after fiscal year end and file its quarterly reports within 35 days after quarter end.
Definition of Accelerated Filer
An accelerated filer is an issuer that meets the following conditions as of the end of its fiscal year:
has a public float of $75 million or more as computed on the last business day of the issuer’s most recently completed second fiscal quarter;
has been subject to reporting requirements under the Securities and Exchange Act of 1934 for at least 12 calendar months;
has filed at least one annual report; and
is not eligible to use Forms 10-KSB and 10-QSB for its annual and quarterly reports.
Copy of Final SEC Rules Postponing Final Phase-in Period for Acceleration of Periodic Report Filing Dates
A copy of the final SEC rule postponing the final phase-in period for acceleration of periodic report filing dates is available on the SEC’s website at www.sec.gov by selecting Final Rule: Temporary Postponement of the Final Phase-In Period for Acceleration of Periodic Report Filing Dates or by going to http://www.sec.gov/rules/final/33-8507.htm.
SEC’s Frequently Asked Questions on Current Report on Form 8-K
The staff at the SEC’s Division of Corporation Finance has issued a FAQ relating to the Current Report on Form 8-K. The FAQ contains 30 questions and answers that address various issues raised regarding the implementation and interpretation of the revised Current Report on Form 8-K. Be aware that the FAQ does not constitute a rule, regulation or statement of the SEC, but represents the view of the staff on the various issues discussed.
Among other things, the FAQs address a number of questions relating to disclosure of compensation and employment arrangements with executive officers and directors under Item 1.01 (Entry of a Material Definitive Agreement), including the following:
Copy of Frequently Asked Questions on Current Report on Form 8-K
A copy of the SEC’s FAQs on the Current Report on Form 8-K is available on the SEC’s website at www.sec.gov by selecting Current Report on Form 8-K Frequently Asked Questions or by going to http://www.sec.gov/divisions/corpfin/form8kfaq.htm.
Members of Gray Plant Mooty Securities Practice Team
Attorneys on the Securities Team include:
J.C. Anderson (612) 632-3002
Lindley S. Branson (612) 632-3024
Amy E. Dahl (612) 632-3229
Jennifer M. Dasari (612) 632-3047
Rick Hauser (612) 632-3095
Joseph T. Kinning (612) 632-3388
Leslie B. Korsh (612) 632-3211
Daniel R. Tenenbaum (612) 632-3050
Mark D. Williamson (612) 632-3379
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This newsletter is a periodic publication of Gray, Plant, Mooty, Mooty & Bennett that should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult legal counsel concerning your situation and any specific legal questions you may have.
Copyright. 2005. All rights reserved.
Gray, Plant, Mooty, Mooty & Bennett, P.A.
This article is provided for general informational purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. You are urged to consult a lawyer concerning any specific legal questions you may have.
Gray Plant Mooty is recognized as one of the leading corporate law firms in Minnesota and one of the top franchise firms in the world. Our roots go back to 1866. Today, we are a 180-plus attorney, full-service firm with offices in Minneapolis and St. Cloud, Minnesota; Washington, D.C.; and Fargo, North Dakota.