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Advisory Panel Votes Overwhelmingly in Favor of Scaled Section 404 Reforms for Small Businesses

Advisory Panel Votes Overwhelmingly in Favor of Scaled Section 404 Reforms for Small Businesses

by Rick Turoczy on April 21, 2006

The Securities and Exchange Commission’s (SEC) Advisory Committee on Smaller Public Companies voted overwhelmingly in favor of scaled reform recommendations for Section 404 (internal controls) of the Sarbanes-Oxley Act of 2002. In a 18-3 vote Thursday, the advisory committee agreed to a final set of recommendations for submission to the SEC.

This final report reflects a majority of BIO’s reform recommendations. BIO led industry efforts to reform cost burdens of Section 404 for smaller companies.

“For small public companies, Sarbanes-Oxley can be excruciatingly time-consuming and costly because of its ‘one-size-fits-all’ approach,” said Jim Greenwood, BIO’s president and CEO. “After months of interviewing and meeting with stakeholders representing all industries, it is clear that the advisory panel understands the impact of the unintended consequences of the Sarbanes-Oxley Act.

“Under Section 404, many small biotechnology companies would be forced to choose between funding research and complying with the regulation’s demands. These companies work with cutting-edge science that results in products designed to improve and save the lives of our loved ones.

“BIO applauds the advisory panel’s final report and recommends that the SEC expeditiously take action to incorporate the recommendations in reforming section 404,” Greenwood said.

Advisory Panel Votes Overwhelmingly in Favor of Scaled Section 404 Reforms for Small Businesses

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