When the U.S. House of Representatives passed its financial reform bill in December, it contained a provision that would exempt non-accelerated filers (companies with a market capitalization of less than $75 million) from Sarbanes-Oxley 404(b) compliance, or at least delay it substantially while more cost-benefit analyses are completed. But Sarbox consultancies and audit specialists cautioned those SMBs not to bank on the exemption yet.
Yes, the advice is motivated in part by the consultants' self-interest. If these businesses are exempt from compliance requirements, the consultants stand to lose a signficant number of clients or potential clients. But it is wise advice. There's little chance that the bill would make its way through the remainder of the legislative process before the June 15 compliance deadline even if all of Capitol Hill wasn't razor-focused on health care reform right now.
That doesn't mean, however, that the exemption won't come eventually. In fact, it's one step closer. Compliance Week editor Matt Kelly pointed out Thursday that Sen. James DeMint, R-S.C., has said he will introduce an amendment to the Senate's financial reform bill that would exempt non-accelerated filers from Sarbox 404(b) compliance. Kelly writes:
Precisely what language DeMint will include in his bill is unclear, but he has promised that it will be at least as vigorous as the language in the House bill... DeMint's exact words were "I think we can make it broader."
Just how much broader DeMint thinks his amendment will go is not clear.