Impact on stock market crash on SOX ... 2569
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hey … i’m curious.
is there any exemptions from SOX 404 compliance if the recent turmoil has caused a pubco’s market value to decline to say USD150M?
would appreciate if you could point me to literature which explains this … thanks…
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Non-accelerated filers (i.e. issuers with a market capitalization below USD 75 million) are not required to have the effectiveness of their internal control over financial reporting audited by a registered public accounting firm (i.e. are excempt from section 404(b) SOA). They are only required to have the the effectiveness of their internal control over financial reporting assessed by their management (i.e. only section 404(a) SOA).
Go to sec.gov, go to spotlight on implementation of internal control over financial reporting and you will find the latest final rule that postposed compliance for section 404(b) for non-accelerated filers for the financial year 2008.
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Entering and Exiting Accelerated Filer Status.
The determination at the end of the issuer’s fiscal year for whether a nonaccelerated filer becomes an accelerated filer, or whether a non-accelerated filer or accelerated filer becomes a large accelerated filer, governs the deadlines for the annual report to be filed for that fiscal year, the quarterly and annual reports to be filed for the subsequent fiscal year and all annual and quarterly reports to be filed thereafter while the issuer remains an accelerated filer or large accelerated filer.
Once an issuer becomes an accelerated filer, it will remain an accelerated filer unless the issuer determines at the end of a fiscal year that the aggregate worldwide market value of the voting and non-voting common equity held by non-affiliates of the issuer was less than USD50 million, as of the last business day of the issuer’s most recently completed second fiscal quarter. An issuer making this determination becomes a nonaccelerated filer. The issuer will not become an accelerated filer again unless it subsequently meets the conditions in paragraph (1) of this definition.
Once an issuer becomes a large accelerated filer, it will remain a large accelerated filer unless the issuer determines at the end of a fiscal year that the aggregate worldwide market value of the voting and non-voting common equity held by non-affiliates of the issuer was less than USD500 million, as of the last business day of the issuer’s most recently completed second fiscal quarter. If the issuer’s aggregate worldwide market value was USD50 million or more, but less than USD500 million, as of the last business day of the issuer’s most recently completed second fiscal quarter, the issuer becomes an accelerated filer. If the issuer’s aggregate worldwide market value was less than USD50 million, as of the last business day of the issuer’s most recently completed second fiscal quarter, the issuer becomes a nonaccelerated filer. An issuer will not become a large accelerated filer again unless it subsequently meets the conditions in paragraph (2) of this definition.
The determination at the end of the issuer’s fiscal year for whether an accelerated filer becomes a nonaccelerated filer, or a large accelerated filer becomes an accelerated filer or a non-accelerated filer, governs the deadlines for the annual report to be filed for that fiscal year, the quarterly and annual reports to be filed for the subsequent fiscal year and all annual and quarterly reports to be filed thereafter while the issuer remains an accelerated filer or non-accelerated filer.
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You can find it in the Code of Federal Regulations
17 CFR 240.12b-2.
Actually both me and kymike are correct:- An issuer becomes an accelerated filer if the market capitalization of its equity securities reaches USD 75 million
- However, if an issuer is already an accelerated filer, then the market capitalization of its equity securities needs to drop below USD 50 million in order to stop being an accelerated filer and to become a non-accelerated filer.
You can find out if your issuer has already been an accelerated filer in the previous years by going to sec.gov to Search for companies and then checking the forms 20-F that your company filed. At the top of each form 20-F you can see whether your issuer is a non-accelerated, an accelerated or a large accelerated filer.