Securities and Exchange Commission April 2005 – Federal Register Recent Federal Regulation Documents

The Advisory Committee is soliciting public comment on a summary of its proposed Committee Agenda. The Committee Agenda sets forth the specific issues that the Committee proposes to address in connection with its evaluation of the current securities regulatory system for smaller public companies, including the impact of the Sarbanes-Oxley Act of 2002 on areas under consideration.

The Securities and Exchange Commission (``SEC'' or ``Commission'') is amending Regulation S-X to amend the date for compliance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (``Statement No. 123R'') so that each registrant that is not a small business issuer will be required to prepare financial statements in accordance with Statement 123R beginning with the first interim or annual reporting period of the registrant's first fiscal year beginning on or after June 15, 2005. We also are amending the effective date for compliance with Statement No. 123R so that each small business issuer will be required to prepare financial statements in accordance with Statement 123R beginning with the first interim or annual reporting period of the registrant's first fiscal year beginning on or after December 15, 2005.

The Commission is adopting amendments to Form 20-F to provide a one-time accommodation relating to financial statements prepared under International Financial Reporting Standards (``IFRS'') for foreign private issuers registered with the SEC. This accommodation applies to foreign private issuers that adopt IFRS prior to or for the first financial year starting on or after January 1, 2007. The accommodation permits eligible foreign private issuers for their first year of reporting under IFRS to file two years rather than three years of statements of income, changes in shareholders' equity and cash flows prepared in accordance with IFRS, with appropriate related disclosure. The accommodation retains current requirements regarding the reconciliation of financial statement items to generally accepted accounting principles as used in the United States (``U.S. GAAP''). In addition, the Commission is amending Form 20-F to require certain disclosures of all foreign private issuers that change their basis of accounting to IFRS.

The Securities and Exchange Commission is adopting a rule addressing the application of the Investment Advisers Act of 1940 to broker-dealers offering certain types of brokerage programs. Under the rule, a broker-dealer providing advice that is solely incidental to its brokerage services is excepted from the Advisers Act if it charges an asset-based or fixed fee (rather than a commission, mark-up, or mark- down) for its services, provided it makes certain disclosures about the nature of its services. The rule states that exercising investment discretion is not ``solely incidental to'' the business of a broker or dealer within the meaning of the Advisers Act or to brokerage services within the meaning of the rule. The rule also states that a broker or dealer provides investment advice that is not solely incidental to the conduct of its business as a broker or dealer or to its brokerage services if the broker or dealer charges a separate fee or separately contracts for advisory services. In addition, the rule states that when a broker-dealer provides advice as part of a financial plan or in connection with providing planning services, a broker-dealer provides advice that is not solely incidental if it: holds itself out to the public as a financial planner or as providing financial planning services; or delivers to its customer a financial plan; or represents to the customer that the advice is provided as part of a financial plan or financial planning services. Finally, under the rule, broker-dealers are not subject to the Advisers Act solely because they offer full- service brokerage and discount brokerage services (including electronic brokerage) for reduced commission rates.