In remarks to reporters after a speech in Washington, Securities and Exchange Commission Chairman Christopher Cox said that small companies aren't likely to receive any exemptions from the Sarbanes-Oxley Act.
In December, the SEC's Advisory Committee on Smaller Public Companies published an exposure draft of its final report, outlining changes to the Sarbanes-Oxley Act for micro-cap and small-cap public companies -- effectively, a proposal to free an estimated 80 percent of public companies, with market values less than $125 million, from at least part of the act's internal controls provisions.
A Bloomberg News article said that after delivering a speech on executive compensation to a Stanford Law School forum on corporate governance, Cox told reporters the SEC's emphasis is on making Section 404 work and implementing it in a cost-effective and investor-protected way, rather than simply waiving it. His comments were the first he has publicly offered on the matter.
In a recent speech, SEC Commissioner Roel Campos also said that he personally doesn't believe small companies should be exempted from SOX.
The advisory committee will present its final recommendations to the SEC by April 23.Sen. Paul Sarbanes, D-Md., also recently spoke out in strong defense of the bill that bears his name, saying that critics of the law should keep in mind the catastrophic business collapses that spurred the bill's passage. Meanwhile, Rep. Michael Oxley, R-Ohio, the other half of the legislation, recently authored a letter to the SEC stating that he believes the agency has exemption power over the application of SOX, something other letter authors, including a group of 20 professors, disagree with.
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