April 3, 2006
We wish to applaud the efforts of the Advisory Committee and are in general agreement with their recommendations except in one critical area:
Recommendation IV.P.1 – recommends that Small Business Issuer-specific scaled disclosure accommodations be aggregated into Regulations S-K and S-X, and separate specialized disclosure forms for smaller companies be ceased.
We strongly disagree with the planned termination of the Small Business Issuers scaled disclosure program as it will result in drastically increased legal and accounting costs for all fully reporting small business issuers.
Increased costs of regulatory compliance are driving increasing numbers of public companies to foreign markets and unregulated status, which is not in the public interest.
The regulatory community should work to better understand the unique needs and characteristics of small business issuers and to implement a regulatory regime which promotes, rather than impedes, capital formation for this segment of the market.
We strongly recommend that an Advisory Committee on Small Business Issuers be formed to address the specific issues facing the companies and investors in this segment of the public markets.