ICBA commends the SEC for issuing rules that would (i) significantly expand the number of nonaccelerated filers which are exempt from the auditor attestation requirements of SOX 404(b); (ii) simplify and reduce duplicative disclosure requirements for SEC filings; (iii) simplify private offering rules; (iv) amend the shareholder proposal process; and (v) regulate proxy advisers.
ICBA strongly opposed the SEC proposal to raise the reporting threshold to $3.5 billion from $100 million for Form 13F reports filed by institutional investment managers.
SOX 404(b) Relief. ICBA strongly supports the recent SEC’s final rules regarding nonaccelerated filers that expanded the nonaccelerated filer definition to include “smaller reporting companies” – those with market capitalizations of less than $700 million and total annual revenues of less than $100 million. Not only are these companies exempt from the auditor attestation requirements of SOX 404(b), but they may take advantage of scaled disclosure requirements.
ICBA supports expanding the nonaccelerated filer definition even further to include all smaller reporting companies with market capitalizations of less than $700 million regardless of their total revenue. In other words, the total revenue test should be eliminated from the definition of nonaccelerated filer.
Proxy Advisory Firms. ICBA commends the SEC’s new rules on proxy advisory firms that promote greater transparency among the two firms that dominate the industry—ISS and Glass Lewis. Under the new rules, proxy advisors will be forced to publicly disclose (i) their material conflicts of interest and (ii) their policies regarding how a registrant may respond to the proxy advisory’s advice to the registrants’ stockholders.
SEC Simplifies Disclosure Rules. ICBA also supports the SEC simplifying and eliminating duplicative disclosure requirements for SEC filers which will mitigate the reporting burden of smaller reporting companies. ICBA commends the SEC for simplifying the private offering rules particularly with respect to Rule 144 offerings which will help community banks raise capital.
Reporting Thresholds for Form 13F filings. Press reports indicate that the SEC shelved its proposal to raise the reporting threshold for Form 13F reporting from its present level of $100 million to $3.5 billion.
ICBA opposed the proposal because it would impair the ability of many publicly held community banks to identify their most active shareholders and engage with them.
Staff Contact: Chris Cole and Jenna Burke
Executive Vice President, Senior Regulatory Counsel
Senior Vice President and Senior Regulatory Counsel