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ANALYSIS

Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
 
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
 
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
 
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
 
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SEC close to finalizing rules to help small public companies, private firms

By Nicholas Rummell

The Securities and Exchange Commission plans to finalize several rules affecting private and small corporations, including a rule that would allow private companies to issue stock option grants more easily.

Speaking at a roundtable forum today, John White, the director of the SEC’s division of corporation finance, said that “it’s my ambition to get to the finish line” on the rules by the end of the year. Mr. White conceded that the SEC held back from addressing more expansive rulemaking so that the agency avoided “biting off more than we could chew.”

The six rules discussed during the roundtable, all of which were proposed earlier this year, were designed to loosen rules somewhat for private companies and small public companies. Comment periods for all but one of the rules recently expired; one of the rules has an Oct. 9 comment period.

One of these rules, proposed in July, would allow private companies to avoid having to register securities used in employee stock option plans. Companies currently are required to register securities when they issue stock options to 500 or more holders that are worth more than $10 million at the end of the most recent fiscal year.

The proposed rules also would allow private companies to forgo auditing their financial statements related to issuing such stock options. Several public accounting firms have stated that they don’t believe private companies need to obtain audited financial statements unless an audit is needed for other reasons.

Among the other rules discussed during the roundtable include simplifying Form D to allow for electronic filing, as well as raising the threshold for smaller company exemptions to $75 million from $25 million in public float.

Mr. White also stated that the SEC has no plans to extend the management guidance deadline for Sarbanes-Oxley, and that an extension for the audit portion of SarbOx would not be granted—if at all—until well after March 2008. The SEC plans to conduct a cost-benefit analysis on SarbOx, which will begin next March.

Write to the editors at fw_editor@financialweek.com.
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