The U.S. Securities and Exchange Commission intends to propose changes in corporate disclosure rules as the first in a series of steps designed to improve the financial reporting system.
Specifically, the SEC intends to propose rules that will:
- provide accelerated reporting by companies of transactions by company insiders in company securities, including transactions with the company;
- accelerate filing by companies of their quarterly and annual reports;
- expand the list of significant events requiring current disclosure;
- add a requirement that public companies post their Exchange Act reports on their web sites at the same time they are filed with the SEC; and
- require disclosure of critical accounting policies in Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in annual reports.
“The steps we announce today represent only a beginning in the realization of an important regulatory agenda,” SEC chairman Harvey Pitt said.
“These steps will provide significant improvements quickly while other proposals are considered. We will be working on our own and together with Congress, the President’s Working Group, companies, investor groups and other interested participants. We anticipate further reform proposals covering financial reporting and disclosure requirements, accounting standard setting, regulation of the auditing process and profession and corporate governance.”