19 August 2002
Mr. Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street, N.W., Stop 6-9
Washington, D.C. 20459
Re: Certification of Disclosure in Companies' Quarterly and Annual Reports-File No. S7-21-02
Dear Mr. Katz:
The U.S. Advocacy Committee (USAC) and the Financial Accounting Policy Committee (FAPC) of the Association for Investment Management and Research (AIMR)1 appreciate the opportunity to comment on the SEC's proposed rule to require certain officers of a company to certify the information in that company's quarterly and annual reports.
The USAC is a standing committee of AIMR charged with responding to new regulatory, legislative, and other developments in the United States affecting the investment profession, the practice of investment analysis and management, and the efficiency of financial markets. The FAPC is a standing committee of AIMR charged with both maintaining liaison with standard setters who develop financial accounting standards and regulate financial statement disclosures, and responding to new regulatory initiatives.
The USAC and FAPC deliberated extensively on the SEC's original proposal that was issued on June 12, 2002, and that would have required certain certifications by a company's principal executive officer and principal financial officer in the company's quarterly and annual reports. In keeping with the thrust of the original proposal, we want to reiterate our support for measures that reinforce corporate management's assumption of appropriate responsibility for corporate actions, and for ensuring the integrity of information disseminated to investors about the company, including the information provided in corporate financial reports.
In light of the changes reflected in the supplemental information issued on the proposal following passage of the Sarbanes-Oxley Act of 2002, we offer our comments below.
Augmentation of Rule's Scope
We agree that the certification requirement, as implemented, should extend to "persons performing similar functions," as well as explicitly to the principal executive officer and principal financial officer. Multi-division companies may have different persons who are responsible for collecting and coordinating financial data. We thus believe that this change from the original proposal helps to capture the appropriate individuals responsible for the information ultimately provided to investors and the investing public.
We also support the change that extends the certification requirements to foreign private issuers. We have consistently taken the position that if foreign issuers want access to the U.S. markets, they should provide information that is comparable to what is required of other market participants, and on the same timely basis.
We appreciate the opportunity to comment on this revised rule proposal. If we can provide additional information, please do not hesitate to contact us.
|/s/ Deborah A. Lamb
Deborah A. Lamb
Chair, U.S. Advocacy
| /s/ Ashwinpaul C. Sondhi|
Ashwinpaul C. Sondhi, Ph.D.
Chair, Financial Accounting Policy
cc: U.S. Advocacy Committee
Financial Accounting Policy Committee
Patricia D. Walters, Ph.D., CFA - Sr. Vice President, AIMR Professional Standards and Advocacy
Rebecca T. McEnally, Ph.D., CFA - Vice President, AIMR Advocacy
Nazir Rahemtulla, CFA - Professional Standards and Advocacy
Linda L. Rittenhouse, Esq. - Professional Standards and Advocacy
|1||With headquarters in Charlottesville, VA, and regional offices in Hong Kong and London, the Association for Investment Management and Research® is a non-profit professional organization of over 59,000 financial analysts, portfolio managers, and other investment professionals in 111 countries of which 45,300 are holders of the Chartered Financial Analyst® (CFA®) designation. AIMR's membership also includes 117 affiliated societies and chapters in 37 countries. AIMR is internationally renowned for its rigorous CFA curriculum and examination program, which had more than 100,000 candidates from 143 nations enrolled for the June 2002 exam.|