SEC Proposes Simplifying Statements

The Securities and Exchange Commission on Tuesday proposed steps to simplify financial statements sent by publicly traded companies to investors and help slash regulatory expenses for small businesses.

Commission chief Arthur Levitt Jr. said the agency’s actions should make U.S. capital markets more efficient without harming investors. “To this end, we seek a delicate balance that will provide efficiency without impairing investor protection,” he said.

The public has 90 days to comment on the proposal to shorten financial statements to investors and 60 days to comment on the other proposals, said Linda Quinn, director of the SEC’s corporate finance division.

The agency also proposed eliminating barriers for companies that make offshore securities offerings while they are in the middle of business acquisitions. At the same time, however, the agency proposed ways to curb abuses in unregistered offshore securities deals.

The SEC will continue requiring that annual reports and other statements to shareholders include income and cash flow data, stockholder equity and footnotes regarding accounting policies.