News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release
June 26, 2007  

CONTACT: Kate Gilman/ Austin Bonner,  (202) 225-4038

SEC Refuses to Provide Cost Estimate for Small Companies
Chairman Cox Confirms there is No Data to Support Claim that New Rules Lower Compliance Costs

WASHINGTON – After failing to respond to a request from the House Small Business Committee for information about the costs burden new SOX 404 regulations will place on small businesses, Chairman Christopher Cox stated today that the Securities and Exchange Commission (SEC) has no intention to immediately conduct an analysis.  

“The SEC says that small public companies should receive “a substantial benefit in terms of lower costs of compliance” under its new regulations,” Chairwoman Nydia Velázquez said.  “Without conducting a rigorous analysis of the new cost burdens, how could they possibly know that?  Not only has the SEC not done an analysis, but it is clear that they plan to move forward with implementation before they ever do one.  I am disappointed in the agencies’ reluctance to provide transparency for this nation’s small companies.”  

Chairwoman Velázquez questioned Chairman Cox about the SEC’s failure to develop a cost estimate for the implementation of the new SOX 404 regulations today at a meeting of the Financial Services Committee.  The committee wrote to the SEC and PCAOB after neither of the agencies was able to estimate the cost burden that their new regulations will place on small businesses during a June 5 hearing on Sarbanes-Oxley Section 404.  While the PCAOB did respond by the June 25 deadline, it did not provide a cost estimate.  The SEC has yet to respond. 

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