Remarks by Commissioner Atkins to PLI’s “SEC Speaks in 2008” Program
 
February 25, 2008
 

In a recent speech at the “SEC Speaks” program in Washington D.C., SEC Commissioner Paul S. Atkins stated that he believed the SEC could do a better job in providing predictability and transparency to the private sector in how the SEC operates with respect to both procedure and substance. According to the commissioner, with respect to procedure, the SEC must follow uniform procedures both within headquarters and across divisions and regions and, with respect to substance, the SEC must provide predictable outcomes and the manner in which those outcomes are reached must be transparent.

One of the topics that the Commissioner identified as an area where the SEC lacks predictability is determining what constitutes materiality. The Commissioner noted that materiality is an objective test and that based upon the U.S. Supreme Court’s ruling in TSC Industries v. Northway, something is material if “there is a substantial likelihood that a reasonable shareholder would consider it … as having significantly altered the ‘total mix’ of information made available.” However, in the Commissioner’s opinion, Staff Accounting Bulletin 99, which was issued in 1999, has muddied the waters on the issue of materiality and has resulted in issuers feeling compelled to inundate shareholders with an abundance of trivial information. The Commissioner urged that the SEC should revisit and clear up this issue with the full input of the investor, legal, accounting, academic and business communities.

http://www.sec.gov/news/speech/2008/spch020808psa.htm