NEW YORK (CNN/Money) -
The Securities and Exchange Commission voted Tuesday to make companies file financial reports more quickly and to make corporate officers certify financial reports and disclose more quickly when they buy or sell their company's stock.
Members of the SEC unanimously voted to require companies to file annual reports 60 days after the end of the year and quarterly reports 35 days after the end of each quarter.
| |
Related stories
| |
| | |
| | |
|
Previously, companies had 90 days to file annual reports on form 10-K and 45 days to file quarterly reports on form 10-Q.
The SEC also voted 5-0 to require corporate officers to disclose within two days any purchase or sale of their company's stock (see more). That rule takes effect on August 29.
It also approved new rules requiring that chief executive officers and chief financial officers certify the accuracy of their financial reports.
The certification rule mirrors Section 402 of the Sarbanes-Oxley Act of 2002, which established sweeping new rules for corporate governance in an effort to restore investor confidence, shaken by a wave of corporate scandals from Enron Corp. to WorldCom Group.
The SEC will take three years to phase in the changes to its financial reporting rules. In the first year of the phase-in, for example, companies will have 40 days to file 10-Qs and 75 days to file 10-Ks.
The first companies required to comply with the new rules will be companies whose fiscal year ends after Dec. 15, 2003, and the first document they must file under the new rules is their 10-K for fiscal year 2003.
The new disclosure rules will apply only to companies that have been regulated for a year or more and with a market capitalization of at least $75 million.
The SEC also voted Tuesday on other rule changes, including technical regulations relating to security futures.
SEC voting members include Chairman Harvey Pitt and four commissioners, all of whom are nominated by the president and approved by the Senate.
Pitt and his agency have come under fire during the firestorm that has arisen amid the spectacular collapse of Enron Corp. and the subsequent corporate scandals associated with WorldCom Group, Global Crossing Ltd. and many more.
Pitt has been criticized as too slow to respond to the scandals and too sympathetic to corporate interests. Democrats, as well as Republican Sen. John McCain of Arizona, have called for him to resign.
But Pitt has dismissed such accusations as being politically motivated, and President Bush has continued to support his SEC chairman.
|
