Understandably, there is a lot of confusion right now about CEO/CFO certifications as the Sarbanes-Oxley Act of 2002 has added two more layers – and the SEC is coming out with new guidance about its original requirements almost daily.
Before the Act, the SEC had issued an Order requiring CEOs and CFOs of 947 companies to submit certificates to the SEC secretary on paper. Most of those companies are required to submit this certificates on or before August 14th. A few days ago, the SEC strongly recommended that these certifications also be filed on a Form 8-K (since they arguably are material nonconfidential information that should be widely dissimenated under Regulation FD).
The new Act has two provisions that also require certifications from CEOs and CFOs – these apply to ALL public companies. Section 302 of the Act directs the SEC to adopt rules within 30 days requiring certifications as to various matters in annual and quarterly reports. Companies need not comply with Section 302 until the SEC rules are adopted.
Section 906 of the Act also deals with certification by adding a new Section 1350 to the U.S. criminal statutes which requires each periodic report containing financial statements filed with the SEC to be accompanied by a written statement by the CEO and CFO. In contrast to Section 302, the Section 906 requirement is effective IMMEDIATELY and, therefore, is required for all 10-Qs and 10-Ks (so the 947 companies already subject to the SEC’s Order must make two separate certifications at the time of filing their next 10-Q (or 10-K in the case of companies with a June 30 year-end). Companies not covered by the SEC’s Order are still required to comply with the new Section 906 requirement).
There still are a number of open legal issues relating to the new Section 906 – one of which is what it should look like. The SEC is expected to address these issues soon. Until then, please note that General Electric filed a 10-Q yesterday and created its own form of certification filed in an Exhibit 99. This exhibit is at http://www.sec.gov/Archives/edgar/data/40545/000004054502000039/0000040545-02-000039-index.htm.
There are a number of great law firm client memos on this topic in the SEC Reform Portal under “Certifications under Sections 906 and 302” at http://www.realcorporatelawyer.com/SECReformPortal.html#906.