Companies restricted by the Dodd-Frank financial reporting rules have the first sign of relief with the House passing the Promoting Job Creation and Reducing Small Business Burdens Act (H.R. 37). The Senate is likely to pass the bill, too, with 54 Republican votes. With 60 votes needed to end a filibuster, there are probably six Senate Democrats who will vote for the bill given the substantial Democratic support it had in the House (271-154). But President Obama has said he would veto the bill if it passes the Senate.
Large and small companies generally support the derivatives and reporting provisions the White House objects to. One derivative would obviate nonfinancial companies from posting margin when purchasing derivatives for nonfinancial purposes, and a second allows companies to use a central treasury unit when hedging commercial risks without having to post margin.
Two other provisions focus on Emerging Growth Companies (EGCs), a class of medium-sized companies created by the JOBS Act. One reduces the Securities & Exchange Commission (SEC) registration and disclosure requirements to help EGCs access capital markets more efficiently. The second provides all EGCs and other issuers with annual gross revenues less than $250 million with a voluntary exemption from the SEC’s requirements to file their financial statements in eXtensible Business Reporting Language (XBRL).
March 2015
