On May 23^rd the SEC is going to consider approving certain proposals recommended by the SEC Advisory Committee on Smaller Public Companies. The proposals are intended to ease some of the burden under Section 404 of SOX.

The actual agenda from the SEC website:

“The Commission will consider a number of rule proposals addressing the registration and disclosure requirements for smaller companies, as well as private offerings of securities, including whether:

a) to propose amendments to increase the number of companies eligible for the scaled disclosure and reporting requirements for smaller reporting companies;

b) to propose amendments to expand the eligibility requirements of Form S-3 and Form F-3 to permit registration of primary offerings by companies with a public float of less than $75 million, subject to restrictions on the amount of securities sold in any one-year period;

c) to propose exemptions from the registration requirements of the Securities Exchange Act of 1934 for grants of compensatory employee stock options by non-reporting companies;

d) to propose a new Regulation D exemption for offers and sales of securities to a newly defined subset of “accredited investors,” as well as to propose revisions to the Regulation D definition of “accredited investor,” disqualification provisions, and integration safe harbor and to provide interpretive guidance regarding integration;

e) to propose revisions to Form D and mandate electronic filing of Form D; and

f) to propose amendments to Rule 144 to revise the holding period for the resale of restricted securities, simplify compliance for non-affiliates, revise the Form 144 filing thresholds, and codify certain staff interpretations, as well as to propose amendments to Rule 145.”

Rule 144 is the one to watch. Word is that the SEC will reduce its current one year holding period before public sales can begin without registration to six months. Should this occur most of the Rule 415 problems will dissipate. There is also hope that there will be further clarification and guidance on Worm/Wulff and the ability for non-affiliates and non-promoters in shells to sell under Rule 144.

When the news hits we will report the results.

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