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

For Immediate Release
February 1, 2008     

CONTACT: Press Office,  (202) 225-4038

SEC Announces One-Year Delay on Implementation of Sarbanes-Oxley’s Section 404(b)
Commission to Conduct Study on Small Firms’ Costs of Compliance

WASHINGTON, D.C. — At the urging of the House Committee on Small Business, the Securities and Exchange Commission (SEC) today officially announced a delay of SOX 404(b) implementation as it applies to small firms.  The announcement follows SEC Chairman Christopher Cox’s testimony before the Committee last December, when he promised to call for a one year delay on compliance requirements for the nation’s smallest public companies. The Commission will also conduct a cost-benefit analysis, which will examine burdens of implementation on small businesses throughout the United States.

“I have repeatedly called on the SEC to delay implementation and conduct this study, and I am very pleased that they are taking action.  It is essential, however, that their analysis be designed with the needs of entrepreneurs in mind.  That is the only way it will meet its intended goal,” said Chairwoman Nydia M. Velázquez.

A recent survey by the U.S. Chamber of Commerce found that 66 percent of small businesses were already incurring significant compliance costs more than a year before SOX 404(b) was scheduled to go into effect.  Chairwoman Velázquez underscored that “the SEC must move quickly to prevent these entrepreneurs from being saddled with more unnecessary expenses.”

The Chairwoman also noted that it is critical for the Commission to collect the proper data, and that to this end; the input of small firms should be included in designing the study.  She also added that the results should be made available to the public without delay.

“I will continue to keep a very close eye on the SEC throughout the entire process,” said Chairwoman Velázquez. “This is a crucial step in the right direction, but it is by no means the end of this struggle for America’s small businesses.”

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