Majority of Smaller Public Companies in High-Growth Sectors Support Sarbanes-Oxley Section 404 Reform
WASHINGTON, D.C. (April 3, 2006) – A multi-industry coalition of 10 healthcare technology, high-technology, electronics and information technology, and semiconductor and venture capital industries led by the Biotechnology Industry Organization (BIO) joined forces to urge the Securities and Exchange Commission (SEC) to ease unintended cost burdens caused by Section 404 of the Sarbanes-Oxley Act of 2002.
In a letter submitted to the SEC today, the multi-industry coalition strongly urges Chairman Christopher Cox and the commissioners to promptly adopt recommendations of the Advisory Committee for Smaller Public Companies calling for scaled Section 404 reforms that provide microcap and smaller public companies relief from costly Section 404 requirements. The letter may be viewed at http://www.bio.org/tax/sox/20060403.pdf.
“This is an unprecedented effort by those industries driving the new economy to persuade the SEC to take regulatory action quickly,” said Jim Greenwood, BIO’s president and CEO. “Unintended consequences of Section 404 could cost smaller public companies about $1 million each year – money that could be invested in sophisticated new technologies that boost the U.S. economy.
“The SEC’s support and adoption of the Advisory Committee’s recommendations will have a critical impact on America’s ability to maintain its global competitiveness in the high-growth sectors of our nation’s economy,” Greenwood said.
Sarbanes-Oxley, the corporate governance law, requires publicly traded companies to adhere to a one-size-fits-all approach to financial reporting and auditing procedures. The SEC’s 21-member Advisory Committee on Smaller Public Companies was formed to consider ways of improving the impact of Sarbanes-Oxley on small public companies.
Members of the multi-industry coalition include BIO, the National Venture Capital Association, TechNet, Electronic Industries Alliance, Semiconductor Industry Association, Telecommunications Industry Association, California Healthcare Institute, Advanced Medical Technology Association, Medical Device Manufacturers Association and the Association of Bioscience Financial Officers.
BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and 31 other nations. BIO members are involved in the research and development of healthcare, agricultural, industrial and environmental biotechnology products.