July 21, 2009

Auditors May Finally Get an Annual Reporting Obligation

Recently, the PCAOB issued a press release noting that it had proposed rules way back in June ’08 that would require the auditors registered with the PCAOB to submit an annual report by June 30th of each year. Since the SEC hadn’t yet acted to approve the PCAOB’s proposal, auditors were able to avoid filing an annual report this year, as well as avoid paying an annual fee for ’09.

Not too long after the PCAOB’s press release, the SEC acted by posting this notice to finally solicit comments on the PCAOB’s proposal. Assuming no comments sway the SEC otherwise, I imagine the SEC will approve the PCAOB’s proposal in a few months – and then registered auditors will be required to submit their first annual report on Form 2 to the PCAOB by June 30, 2010 (and the first annual fee, in an amount to be announced by the PCAOB, will be due in that same year). A separate obligation to file any required special reports on Form 3 will commence as soon as the SEC approves the PCAOB’s proposal.

Note that the Nasdaq is holding a webcast tomorrow (with a repeat performance the following Wednesday) for those that want to learn how to navigate their new “Application Center.” Among many other topics, the new application process was discussed during our recent webcast with senior Nasdaq Staff, but these Nasdaq webcasts will drill down more deeply into the application topic.

RiskMetrics’ Governance Exchange

In this podcast, Jill Lyons and Stephen Deane of RiskMetrics describe their new social media tool called the “Governance Exchange,” including:

– What is the “Governance Exchange”?
– Who can belong to it?
– Why are members joining?
– Any surprises so far?

Sleepers in the SEC’s Proposals?

When the SEC puts out a big proposal, there inevitably are some sleepers because that’s the way of the world. I recently received this note from a member about the SEC’s recent proxy solicitation proposals:

There are some potent changes in the proposed proxy amendments that will generally make contests easier to conduct. One amendment codifies a recent no-action letter to Carl Icahn that allows insurgents to include nominees of other insurgents on their proxy cards.

And the amendments also overrule a 2004 case (i.e. Mony Group v. Highfields Capital Management) where a court ruled that a shareholder conducting an exempt solicitation can’t send shareholders management’s proxy card and encourage them to vote as suggested by the insurgent.

– Broc Romanek