The SEC proposed updating its "auditor independence" rules and codifying certain staff consultations.
According to the SEC, the proposed amendments to Rule 2-01 of Regulation S-X would, among other things:
- clarify certain affiliate relationships in common control scenarios;
- lessen the look-back period for domestic first-time filers when assessing compliance with the independence requirements;
- expand the categorical exclusions from independence-impairing lending relationships to include certain student loans and de minimis consumer loans;
- replace the reference to "substantial stockholders" under the "business relationship rule" with a substantial influence analysis; and
- introduce a transition framework that addresses "inadvertent" independence violations that result from corporate events such as mergers and acquisitions.
Comments must be submitted with 60 days of publication in the Federal Register.