TheCorporateCounsel.net

February 7, 2006

The SEC’s Budget Proposal for 2007

According to this article, the Bush administration is requesting $906 million for 2007, or about 2% more for the SEC compared to last year. Believe it or not, this is one of the largest increases for a federal agency in a tight budget year. Here are the SEC’s budget request highlights:

– $328 million for Enforcement, a 2% increase

– $101 million for Corp Fin, a 1% increase

– $50 million for Market Reg, flat from last year

– $54 million for Investment Management, a 1% decrease

– $215 million for OCIE, a 1.5% increase (can you believe that OCIE didn’t exist 10 years ago? now it is bigger than Corp Fin, Market Reg and IM combined!)

– An extra $15.3 million to improve technology (eg. implement XBRL and a new case-tracking system)

If you are looking for a job at the SEC, be prepared to be disappointed as this year’s budget is extremely tight, mainly due to last year’s overruns – and next year’s budget envisions a shrinking workforce, providing for a total of 3,685 employees (a decrease of 79 from this year).

The Challenges of EDGAR Searches (and Labeling)

As many of you know, it can be quite challenging to conduct a search on EDGAR. This might start changing; as of yesterday, the SEC now requires each mutual fund to have its own distinct alphanumeric identification, which will help investors searching for information about funds on Edgar (as noted in yesterday’s WSJ article).

Now that the SEC has acknowledged that investors should look to the Web to access corporate information – and in light of the SEC’s e-proxy proposal – I say it’s “high” time that searches be simplified for operating company information too. It is frustrating to input a company’s name into the Edgar search tool and get a result of dozens (tip – using a ticker symbol is the only way to go).

But more importantly, from an investor’s perspective, we need to get away from the legal mumbo jumbo. Can we really expect retail investors to recognize a proxy statement when they see “DEF 14A”? Why not call a “10-Q” a quarterly report instead? Using plain English for labeling is a concept whose time has come.

The Bankers Speak: What to Expect in 2006

Tune in tomorrow for a DealLawyers.com webcast – “The Bankers Speak: What to Expect in 2006” – and hear a panel of bankers riff about the latest trends and developments. Please print off these course materials before the webcast starts. Try a no-risk trial to DealLawyers.com to catch this important program!

Trends of Private Companies

In this podcast, Michael Petrecca, a Partner of PricewaterhouseCoopers’ Private Company Services Group, provides some insight into what trends private companies are facing (see the results of this PwC survey), including:

– What are some of the benefits to be gained by a private company in adopting certain provisions of Sarbanes-Oxley?

– According to PwC’s “Barometer Trends” survey, adopters tend to be from larger businesses, likely as a means to better position themselves for an IPO or to be acquired by a public company. Does this mean that only larger companies should take the time and incur the cost of adopting Sarbanes-Oxley principles?

– Surveyed CEOs also reported that their companies are affected in numerous ways by regulations, with the majority saying the cost of complying with federal and state regulations has increased over the past two years. Do you believe there will be a reversal in this trend in the near future?

– How do private companies determine if the benefits of adopting the principles of Sarbanes-Oxley outweigh the costs?

– Are banks and other financial institutions—typically the primary readers of the private company financial statements—forcing their clients to assume some SOX procedures?