SEC Proposes Significant Sarbanes-Oxley Rule Rollback

May 13, 2019

The Securities and Exchange Commission is seeking to roll back a key provision in the Sarbanes-Oxley Act, which has proven disproportionately burdensome for publicly held community bank holding companies. Under the proposal, companies with less than $100 million in revenue and that are SEC filers would not be required to obtain an attestation of their internal controls for financial reporting from an independent auditor.

The proposed amendment would not, however, change other provisions of the Sarbanes-Oxley Act, including the independent audit committee requirement, the CEO and CFO certifications of financial reports, or the requirement that companies continue to maintain and assess the effectiveness of their internal control over financial reporting. The proposal would also not impact any of the FDICIA reporting requirements for banks.

ICBA is strongly supporting The Community Bank Access to Capital Act of 2019 (S. 1233), introduced by Sen. Mike Rounds (R-S.D.), which would exempt community banks and bank holding companies with less than $5 billion in assets from the Sarbanes-Oxley Act internal control attestation requirements and FDICIA reporting requirements.

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