From: James C. Conboy, Jr. |
As the CEO of a $250,000,000 one-bank holding company with 1,029 shareholders I have been following with great interest the SEC’s evolving “strategy” regarding section 404’s application to “smaller companies”. I believe the interpretive guidance will be of assistance in helping me and our staff in preparing the Management Report. I do believe it would be helpful if the final guidance could address the ability of management to rely on governmental examination reports as part of the evaluation needed to support Management’s Report. In our case we are a one-bank holding company. The bank subsidiary is examined by the federal office of the Comptroller of the Currency (OCC) within an 18-month cycle with ongoing off site reviews. As anyone familiar with OCC exams can verify the exams and their reports are very thorough and should be a tool management can rely on in its evaluation of internal controls. Lastly, I would request the SEC delay implementation of the Management Report requirement for an additional year. While the guidance provided in the December release is helpful it is only in proposal form and even if finalized in March or April does not give our company of 80 employees sufficient time to take the steps necessary to prepare for a Management Report to be issued in 2008 for 2007 without considerable reallocation of staff resources and potentially additional expense with third party vendors. To say the least “small companies” have been “whip sawed” by the implementation schedule for 404 and there remains the very real possibility Congress may retroactively exempt us from 404, so why now hurry the implementation? Thank you for your consideration of these comments. James C. Conboy, Jr. |