SEC Proposes One-Year Delay in Acceleration of Periodic Report Filing Dates
August 31, 2004
Rodney H. Bell- Miami
On August 25, 2004, the SEC published a proposal to postpone for one year the
final phase-in period for acceleration of the due dates of quarterly and annual
reports by “accelerated filers” in order to allow additional time and
opportunity for “accelerated filers” and their auditors to focus on complying
with new requirements regarding internal control over financial reporting.
Currently, the deadline for “accelerated filers” to file annual reports for
fiscal years ending on or after December 15, 2003, is 75 days, and the deadline
for subsequently filed quarterly reports is 40 days. The deadline for annual
reports is scheduled to be shortened to 60 days for fiscal years ending on or
after December 15, 2004, and the deadline for subsequently filed quarterly
reports is scheduled to change to 35 days after the end of each quarter.
“Accelerated filers” must begin to include both a management report and
auditor report on the effectiveness of their internal control over financial
reporting in annual reports filed for the first fiscal year ending on or after
November 14, 2004. SEC rules, as currently drafted, would result in most
“accelerated filers” having to comply for the first time with the internal
control reporting requirements within the same time period that their annual
report filing deadline changes from 75 to 60 days.
The SEC noted in its proposal that several companies and auditors have
expressed concern over their ability to perform the work necessary to comply
with the new internal control requirements at the same time that the periodic
report deadlines are being further accelerated. As proposed, the accelerated
filing phase-in period would be postponed by one year so that the deadline for
annual reports filed by “accelerated filers” for fiscal years ending on or after
December 15, 2004 would remain at 75 days after fiscal year end. Similarly, the
quarterly report deadline for the three subsequently filed quarterly reports for
accelerated filers would remain at 40 days after quarter end. Under the
proposed amendment, the final 60/35 day phase-in periods for “accelerated
filers” would become effective with respect to their first fiscal year ending on
or after December 15, 2005.
The SEC has also proposed conforming amendments to Regulation S-X to apply
the postponed phase-in period to the financial information updating requirements
in other filings, such as registration statements, proxy statements and
information statements. The SEC is inviting comments on various aspects of the
proposal by the 30th day after publication of the proposal in the Federal
Register. An issue of note is the SEC’s request for comments on whether only
the annual report filing deadline should be postponed for one year, leaving the
40 to 35-day phase-in for quarterly reports in effect.
Holland & Knight LLP will provide updates on the SEC proposal in light of
future SEC actions. For more information, e-mail Rodney Bell or James Lurie at
rodney.bell@hklaw.com or
james.lurie@hklaw.com, or call toll
free, 1-888-688-8500.
This Public Companies Alert is a summary for general information and
discussion only. It is not a complete analysis of the matters presented and may
not be relied upon as legal advice which may often turn on specific facts.
Readers should seek legal advice before acting with regard to the matters
mentioned herein.