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Corporate Alert: SEC Adopts Rules to Streamline Reporting Requirements for Small Businesses

Release Date: November 21, 2007

The Securities and Exchange Commission recently adopted three new rules affecting smaller businesses that are designed to simplify reporting, disclosure and capital fund raising requirements.

The new rules open scaled disclosure regulations to an additional 1500 smaller companies through the creation of a new "smaller reporting companies" category. This category now includes companies with less than $75 million in public equity float, or revenues of less than $50 million in the prior fiscal year. The new rules also permit foreign company qualification under this category if a company utilizes domestic filing forms and provides financial statements prepared according to U.S. Generally Accepted Accounting Principles. Revisions to SEC Act Rules 144 and 145 shorten the holding period for restricted securities to six months, and simplify Rule 144 compliance for non-affiliates. Amendments to Exchange Act Section 12(g) now exempt private, non-reporting issuers from registration requirements for compensatory employee stock options issued under employee stock option plans and also provide an exemption for issuers that are required to file reports under Section 13. These exemptions apply only to an issuer's compensatory employee stock options.

For more information regarding the new rules governing small business and their effective dates, please refer to the link below that will direct you to the SEC issued press release dated November 15th:

http://www.sec.gov/news/press/2007/2007-233.htm  

If you have any questions regarding the new rules, please do not hesitate to contact one of the Attorneys listed below, each of which is admitted in New York State.

Michael C. Donlon  
716.843.3881
mdonlon@jaeckle.com  

Kayla E. Klos
716.843.3858
kklos@jaeckle.com  

Joseph Kubarek
716.843.3862
jkubarek@jaeckle.com