Certified Financial Planner Board of Standards, Inc.
November 20, 2002
Jonathan G. Katz
Re: Release No. 33-8138; File No. S7-40-02,Disclosure Required by Sections 404, 406, 407
Dear Mr. Katz:
I am writing to provide information on the Securities and Exchange Commission's (the Commission) proposal to require companies to include new disclosures in their Exchange Act filings. Specifically, CFP Board is commenting on the requirement that companies disclose the number and names of persons that the board of directors has determined to be the "financial experts" serving on the company's audit committee. The CFP Board1 appreciates this opportunity to provide information it hopes is helpful to the Commission.
CFP Board exists to provide consumers an indication of competency in personal financial planning. Therefore, CFP Board has a history of promoting standards in all fields where it will eventually affect consumers, specifically in financial services. CFP Board supports provisions that foster greater competency in public company audit committees.
Considering the uncertainties American's have faced over the last year, CFP Board believes the Commission should do whatever it can to ensure the investing public about the safety and soundness of America's financial markets. Requiring public companies to disclose whether at least one "financial expert" serves on the audit committee will help in this endeavor. CFP Board does not believe consumers will necessarily benefit by public companies automatically disclosing the names of the financial experts on the audit committee. If this information is made public upon request, consumers could obtain the information when they deem it necessary.
While investors may not frequently pay attention to any of the issues surrounding audit committee's financial experts, those that provide financial advice to them may do so more often. CFP Board believes financial planners and other financial services professionals will benefit as well from the Commission's proposed rules. Since a large number of investors rely on outside professional advice, the faith and trust financial planners and other financial services professionals have in particular public companies is as important as consumers themselves.
CFP Board is pleased the Commission has addressed the competency of those serving on public company's audit committees. If you should have any questions about CFP Board or the individuals it certifies, please contact me at 703-414-5814.