That’s why SEC officials have scheduled two meetings for October 30 and October 31 to further consider proposals mandated by the Sarbanes-Oxley Act of 2002 passed as part of a sweeping corporate accounting reform, according to a Dow Jones news report.
In the October 30 session, the SEC will consider proposing rules for the use of pro forma financial information in company earnings reports. It will also consider a rule to require companies to discuss off-balance sheet arrangements in their Management’s Discussion and Analysis section in annual and quarterly reports.
Under the new rules, companies may be required to provide a table of contractual obligations due in the short and long run, and either a table or text disclosure of total contingent liabilities and commitments in the short and long-term, the Dow Jones story reported.
Also scheduled for October 30, the SEC will look into rules that would prohibit a company’s directors and executives from purchasing, selling, or otherwise transferring any equity securities of the company during a pension plan blackout period in which line employees are also prohibited from making equity transactions in company stock, Dow Jones said.
This rule would also require companies to provide advanced notice of pension plan blackout periods.
New Attorney Standards
The next day, the SEC said it would consider rules establishing standards of professional conduct for attorneys who represent companies before the commission.
These standards would include a rule requiring an attorney to report evidence of a material violation of securities laws or breach of fiduciary duty by the company or its officers to the chief legal counsel or the chief executive officer of the company, the SEC said.
If these executives don’t respond appropriately, the attorney may be required to report the evidence to the audit committee, another committee of independent directors or the full board of directors, Dow Jones said.
Finally, the SEC will look into changing the definition of terms used in the definition of dealer for banks under certain securities laws. These proposals relate to the implementation of the specific exceptions for banks from the definitions of “broker” and “dealer” that were amended by the Gramm-Leach-Bliley Act, the SEC said.
On October 16, the SEC proposed new rules to strengthen corporate controls and ethics .
According to the Dow Jones story, those proposals would require companies to designate a financial expert on their corporate boards, adopt internal controls, and disclose whether they have a code of ethics. Another proposed rule would bar corporate executives from coercing, manipulating, or misleading the firm’s auditor.