23 Jan House Finally Passes XBRL Exemption

After a little political battle earlier in the month, the House of Representatives has now passed HR 37, which includes a voluntary exemption for “emerging growth companies” (mostly under $1 billion in revenues) to choose not to utilize Extensible Business Reporting Language (XBRL) for financial statement reporting with the SEC.  The vote, on January 14, was 271-154, including 29 Democrats voting for it. The bill has now gone to the Senate Banking Committee. This will be a nice help for smaller companies to reduce their SEC compliance costs for something that really is not that helpful in most cases.

The bill is actually a combination of 11 different bills, and has other provisions relating to the Dodd-Frank Act including delaying the so-called “Volcker rule.” Of more interest to my blogees are an exemption for so-called merger & acquisition brokers from SEC broker-dealer registration, and a requirement for the SEC to look at ways to simplify their disclosure rules under Regulation S-K. Hopefully the Senate will pass it and the President will see this as a needed shot in the arm for small business, and not the “bank deregulation” bill that some Democratic leaders are painting it as.

Next we hope the Congress will take another look at the bills passed by the House Financial Services Committee last May to reduce the Rule 144 holding period, expand the availability of short form registration on S-3, and provide a sunset of two years for the reverse merger rule under 144 requiring a company to be current in their SEC filings before a sale under that rule can take place post-reverse merger. These also, one would hope, could find ways to bi-partisan and Presidential support. We shall see!