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The SEC designated Charles Niemeier to be the Acting Chairman of the Public Company Accounting Oversight Board – moving over from acting as the Chief Accountant in the Division of Enforcement and co-chairman of the SEC’s Financial Fraud Task Force.

Also today, the SEC held an open meeting and proposed a rule that would direct the SROs to prohibit the listing of any security if the issuer does not comply with the audit committee requirements established by Section 301 of Sarbanes-Oxley. Under the proposed rule, an issuer would not be prohibited from having a security listed so long as:

– each member of the audit committee was independent according to specified criteria in Sarbames-Oxley

– the audit committee was directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditor

– the audit committee had procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters – including procedures for the confidential, anonymous submission by employees regarding questionable accounting or auditing matters.

– the audit committee had the authority to engage independent counsel and other advisors, as necessary; and

– the issuer provided appropriate funding for the audit committee.

The proposed rule would apply to both domestic and foreign listed issuers – but the SEC will note in the proposing release that it seeks specific comment on certain areas due to known conflicts with laws of other countries (e.gs. allowing non-management employees to serve as audit committee members, allowing shareholders to select or ratify the selection of auditors, allowing alternative structures such as boards of auditors to perform auditor oversight functions where such structures are provided for under local law; and addressing the issue of foreign government shareholder representation on audit committees).

The proposed rule would also require disclosure regarding the identification of the audit committee in annual reports and audit committee independence. The proposing release is at http://www.sec.gov/rules/proposed/34-47137.htm.

The comment period is 30 days (and rules must be adopted by late April) – and the transition period is proposed as no later than the 1st anniversary of the final rule. If you listen to the archived webcast, the discussion of this rule starts at minute 26. Much of the discussion is about independence standards for non-listed companies (as proposed, they would have to pick a standard from an SRO of their choice) and application to non-US companies (discussed above). The archive is at http://www.sec.gov/news/openmeetings.shtml.

The SEC will be holding another open meeting next Wednesday, 1/15, at 10 am to adopt rules regarding pro formas and filing of earnings releases; black-out pension funds; code of ethics for senior officers; “financial experts” on audit committees; and internal control reports – as well as analyst independence.