SEC adopts sweeping to changes to disclosure and reporting requirements for smaller companies

• Would apply to Securities Act and Exchange Act rules
• Would extend optional disclosure and reporting requirements to a larger group of smaller companies

• Smaller reporting companies would be defined to include companies with a public float of less than $75 million, up from $25 million for most companies today

• Regulation S-B would be folded into Regulation S-K

• Many S-K items would have a less onerous option for smaller reporting companies
• Issuers could selectively choose some or all of these options (" a la carte approach")

• Small business forms would be eliminated

• Form SB-1 and Form SB-2
• Form 10-KSB and Form 10-QSB
• Form 10-SB

• Proposal Release 33-8819

Follows recommendation made by the
Advisory Committee on Smaller Public Companies

• Advisory Committee

Proposal release 33-8819

• Fed Register PDF  72 FR 39670  7.19.07
• SEC PDF  7.05.07

Hyperlinked index to release

Top of release  ++

Summary  I.

Proposed amendments  II.

Adopted amendments  III.

• Moving S-B items into S-K  III.A
• Moving S-B Item 310 into new S-X Article 8;
  Additional Regulation S-X Changes  III.B
• Regulation S-K scaled disclosure items  III.C

• Overview  III.C.1
• Electing scaled disclosure a la carte  III.C.2

• Eliminating SB forms  III.D
• Qualifying as a smaller reporting company  III.E

• Eligibility and exclusions  III.E.1
• Determination dates  III.E.2
  ◊  Reporting companies  III.E.2.a
  ◊  Non-reporting companies - initial registration III.E.2.b
  ◊  Alternative revenue test  III.E.2.c
  ◊  Entering and exiting status  III.E.2.d

• Miscellaneous  III.F

• Indexing for inflation  III.F.1
• Eliminating transitional format  III.F.2
• Checking the smaller reporting company box  III.F.3

Compliance Dates  IV.

Miscellaneous sections

• Paperwork Reduction Act V.
• Cost-benefit analysis  VI.
• Economic impact  VII.
• Regulatory Flexibility Act analysis  VIII.

Statutory basis and text of amendments  IX.

Proposal release 33-8819

• Fed Register PDF  72 FR 39670  7.19.07
• SEC PDF  7.05.07
• Comment letters  Due by 9.17.07

Hyperlinked index to release:

Top of release   ++

Background    I.

Explanation of Proposals II.

Expanding Smaller Company Scaled Regulation II.A.

• Quantitative standards: smaller reporting company II.A.1.

• Proposed standard II.A.1.a.
• Advisory Committees proposed standard II.A.1.b.

• Exclusions from smaller reporting company II.A.2.

Integrating Regulation S-B into Regulation S-K II.B.

• Policy objectives of proposal II.B.1.
• Specific integration proposals II.B.2.

• Financial statements II.B.2.a.
• Other proposed changes to Regulation S-K II.B.2.b.
• A la carte approach II.B.2.c.
• Eliminating SB Forms II.B.2.d.
• Transition: smaller reporting company status II.B.2.e.
• Eliminating transitional format II.B.2.f.
• Other proposals II.B.2.g.

General Request for Comments III.

Miscellaneous Sections

• Paperwork Reduction Act IV.
• Cost-Benefit Analysis V.
• Cost of Impact on the Economy, Burden on Competition and Promotion of Efficiency, Competition and Capital Formation VI.
• Initial Regulatory Flexibility Act Analysis VII.
• Small Business Regulatory Enforcement Fairness Act VIII.

Statutory Basis and Text of Proposal IX.

Regulation S-K

• S-K Item 10

• Define smaller reporting company
• A la carte approach to disclosure

• S-K Item 101

• Description of business

• S-K Item 201

• Market information

• S-K Item 301

• Selected financial data

• S-K Item 302

• Supplementary financial information

• S-K Item 303

• MD&A

• S-K Item 305

• Market risk disclosures

• S-K Item 310

• Financial statements for smaller reporting companies

• S-K Item 401

• Management

• S-K Item 402

• Executive compensation

• S-K Item 407

• Corporate governance

• S-K Item 503

• Ratio of fixed charges

• S-K Item 504

• Use of proceeds

• S-K Item 512

• Undertakings

• S-K Item 601

• Undertakings

• S-K Item 701

• Recent securities sales

• S-K Item 1118

• ABS disclosures

Securities Act Rules

• Rule 405

• Define smaller reporting company

Law firm - Final release

• Womble Carlyle  Jan 2008
• Nixon Peabody   Jan 2008

Law firm - Proposal release

• Morrison Foerster  July 2007
• Womble Carlyle  7.18.07

Advisory Committee on Smaller Public Companies