SEC OKs Faster Filings

August 27, 2002 ( - The Securities and Exchange Commission wants those corporate financials a bit faster, if you please.

Or if you don’t, for that matter.  Today the SEC voted unanimously (5-0) to accelerate the current timeframes for filing corporate financial information.  However, the SEC noted that the agency was not looking for more information, just sooner.

Perhaps of more immediate concern to plan sponsors, the SEC also voted to require that stock purchases or sales by corporate insiders and those owning 10% or more of a firm’s stock – now be disclosed within two business days.

Currently, insiders have up to 40 days to report trades in company stock executed on public markets – and more than a year to report trades with the company itself.  Those rules take effect August 29.

Faster Financials

Eventually, the SEC will want annual statements 60 days after the firm’s year end, rather than 90 days at present.  Quarterly reports, which were due 45 days after the quarter ended, will have to be filed in 35 days under the new rules.

The SEC had proposed a 30-day filing for quarterly statements, but was persuaded by a number of companies that the timeframe wasn’t adequate.

However, there will be a three-year phase-in period and the accelerated reporting requirements will apply only to companies:

  • under SEC regulation for at least a year
  • that have filed at least one annual report
  • that have a publicly held market capitalization of at least $75 million.

Phased Approach

The changes will be phased in starting in 2003 and in full effect by 2004.  The deadline for quarterly reports for firms with fiscal years ending on or after December 15, will be shortened to 40 days in 2003, falling to 35 days in 2004. 

Corporate annual reports will have to be filed within 75 days of year-end, before falling to 60 days.

Congress had mandated a speedier filing in the Sarbanes-Oxley Bill passed in July.  As part of the accounting reforms incorporated in the bill, insiders were required to file the reports electronically to the SEC and post them on corporate Web sites, beginning July 30, 2003.

However, according to a Dow Jones report, Alan Beller, director of the SEC’s division on corporation finance division, said he expects the agency will revisit the matter before then and will propose requiring electronic filing sooner than Congress demanded.