Our Position

Publicly Held Community Banks and the SEC

Our Position

  • ICBA commends the SEC for issuing rules that would (i) significantly expand the number of nonaccelerated filers which are exempt from the auditor attestation requirements of SOX 404(b); (ii) simplify and reduce duplicative disclosure requirements for SEC filings; (iii) simplify private offering rules; (iv) amend the shareholder proposal process; and (v) regulate proxy advisers.
  • However, ICBA strongly opposes the SEC proposal to raise the reporting threshold to $3.5 billion from $100 million for Form 13F reports filed by institutional investment managers.


SOX 404(b) Relief
ICBA strongly supports the SEC’s final rules regarding nonaccelerated filers. Currently, only SEC filers that have a market capitalization of less than $75 million qualify as “nonaccelerated filers” under SEC rules and are thereby exempt from the auditor attestation requirements of SOX 404(b).

The SEC has expanded the nonaccelerated filer definition to include all “smaller reporting companies” – those with market capitalizations of less than $700 million and total annual revenues of less than $100 million. Not only are these companies exempt from the auditor attestation requirements of SOX 404(b), but they may take advantage of scaled disclosure requirements.

The SEC estimates that the rule change would eliminate approximately $210,000 in audit related expenses each year for these companies, a very significant savings for the approximately 200 community banks and holding companies that qualify.

Proxy Advisory Firms
The SEC also finalized new rules on proxy advisory firms that promote greater transparency among the two firms that dominate the industry—ISS and Glass Lewis. Under the new rules, proxy advisors will be forced to publicly disclose (i) their material conflicts of interest and (ii) their policies regarding how a registrant may respond to the proxy advisory’s advice to the registrants’ stockholders.

SEC Simplifies Disclosure Rules
ICBA also supports the SEC simplifying and eliminating duplicative disclosure requirements for SEC filers which will mitigate the reporting burden of smaller reporting companies. The SEC also has simplified the private offering rules particularly with respect to Rule 144 offerings which will help community banks raise capital.

Reporting Thresholds for Form 13F filings
Adopted in 1975 as part of the Securities Acts Amendments of 1975, Section 13(f) of the Securities Exchange Act of 1934 requires an investment manager to file a report with the SEC if the manager exercises investment discretion with respect to accounts holding equity securities having an aggregate fair market of at least $100 million.

ICBA strongly opposes raising the reporting threshold for Form 13F reporting from its present level of $100 million to $3.5 billion because it will impair the ability of many publicly held community banks to identify their most active shareholders and engage with them. Publicly held community banks will be at a distinct disadvantage with regard to their most active shareholders if they are unable to identify them on a regular basis.

Staff Contact

Christopher Cole

Executive Vice President, Senior Regulatory Counsel

Washington, DC