On December 19, 2007 the Securities and Exchange Commission published a Final Rule amending its disclosure and reporting requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934 to expand the number of companies that qualify for its scaled disclosure requirements for smaller reporting companies.
The amendments apply to all “smaller reporting companies.” The “smaller reporting company” category includes companies that qualified as “small business issuers” before the new amendments, as well as most companies that qualify as “non-accelerated filers.” In general, companies that have less than $75 million in public equity float will qualify for the scaled disclosure requirements under the new amendments. Companies without calculable public equity float will qualify if their revenues were below $50 million in the previous year. Foreign companies may also qualify as “smaller reporting companies”, provided they comply with certain requirements.
The Final Rule moves the scaled disclosure requirements from SEC’s Regulation S-B to Regulation S-K.
To aid “smaller reporting companies” during the transition period, the SEC has published a guide for small businesses called the "Changeover to the SEC's New Smaller Reporting Company System by Small Business Issuers and Non-Accelerated Filer Companies -- A Small Entity Compliance Guide." The guide provides an overview of the major changes and answers to some of the initial questions registrants may have.
The Final Rule is effective on February 4.