In this episode Matt Kelly and I discuss the Treasury Department’s recently released A Financial System That Creates Economic Opportunities-Capital Markets report. The report has multiple proposals, including multiple ideas about rolling back Sarbanes-Oxley compliance, especially for smaller public companies. In this podcast, we discuss the three most significant ones for the compliance practitioner.

  1. Exempt more companies from audits of internal financial control. Companies with market cap below $75 million are currently exempt from the SOX 404(b) requirement that an annual outside audit of internal control over financial reporting. The Trump Administration proposes raising that exemption ceiling to $250 million in market cap.
  2. Doubling the lifespan of Emerging Growth Companies. Congress created a new class of public filers in 2012, “emerging growth companies,” that are exempt from numerous corporate governance and compliance rules for the first five years of their lives; to 10 years.
  3. Ending “social disclosure rules” required under the Dodd-Frank Act. The Dodd-Frank Act imposed several required disclosures such as the Conflict Minerals Rule, the CEO Pay Ratio Rule, and the Mine Safety Rule.

For more on this subject, see Matt’s blog post Treasury Report Eyes SOX Compliance

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