Friday, July 6, 2007
The SEC published its proposed rules to extend the benefits of the current optional disclosure and reporting requirements for smaller companies to a much larger group of companies. The proposal would allow companies with a public float of less than $75 million to qualify for the smaller company requirements (up from the current $25 million for most companies). The SEC states that of the 11,898 companies that filed Annual Reports in 2006, 4,976 of them (or 42%) had a public float of less than $75 million. The proposed rules would also maintain the current scaled disclosure requirements in Regulation S-B, but integrate them into Regulation S-K and eliminate the Commission's "SB" forms. The SEC expects that these changes will simplify regulation for smaller businesses, reduce costs, and mitigate the reported lack of market acceptance associated with smaller filers. These proposals stem from the recommendations of the Advisory Committee on Smaller Public Companies.