Nasdaq Comments on Two SEC Proposals That Will Reduce Compliance Burdens for Public Companies
Publication Date: July 31, 2019 

On July 29, 2019, Nasdaq submitted two comment letters commending the SEC for considering ways to reduce compliance burdens for public companies while maintaining important investor protections.

The first comment letter relates to an SEC proposal that will reduce compliance costs and maintain uniformity across rules by excluding certain smaller reporting companies from the definitions of accelerated and large accelerated filers. The primary result of this change would be to relieve eligible companies from the SOX 404(b) requirement to obtain an independent auditor’s attestation of management’s assessment of the effectiveness of internal control over financial reporting. Nasdaq estimates that at least 399 Nasdaq-listed companies may be affected by the proposed amendments.

The second comment letter relates to an SEC proposal to improve the disclosure requirements for financial statements relating to acquisitions and dispositions of businesses.  Nasdaq’s comment letter addresses parts of the proposal that it believes will positively impact IPO companies or simplify the disclosure framework for issuers that have engaged in acquisitions and dispositions.  Nasdaq also echoes other commenters in urging the SEC to reconsider the proposal to mandate synergy disclosures in pro forma financial information.

Nasdaq applauds the SEC for its continued consideration of ways to improve the regulatory environment for public companies and believes the proposed changes are in line with other reforms the SEC is considering, such as improvements to the quarterly reporting framework. On July 18, 2019, John Zecca, Senior Vice President, General Counsel North America, and Chief Regulatory Officer of Nasdaq Regulation for U.S. Markets, participated in the SEC's Roundtable on the Short-Term/Long-Term Management of Public Companies, our Periodic Reporting System and Regulatory Requirements. Prior to his appearance at the Roundtable, Mr. Zecca submitted a comment letter to the SEC urging the SEC to consider increasing the flexibility of reporting obligations, enhancing transparency around proxy advisors and activist investing, recognizing the value of dual class structures, imposing short interest transparency, and preserving optionality in capital management.

Proposed Amendments to the Accelerated Filer and Large Accelerated Filer Definitions

View Nasdaq’s comment letter here >>

View the SEC’s proposed amendments here >>

Proposed Amendments to Financial Disclosures about Acquired and Disposed Businesses

View Nasdaq’s comment letter here >>

View the SEC’s proposed amendments here >>

SEC's Roundtable on the Short-Term/Long-Term Management of Public Companies

View Nasdaq’s comment letter here >>  

View Chairman Clayton’s Statement at the SEC Staff Roundtable here >>