Small Caps Lobby For SOX Reform

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Small Caps Lobby For SOX Reform

WASHINGTON--(BUSINESS WIRE)--June 3, 2005--Frank Speight, Chairman of the Microcap Company Political Action Committee (MCPAC), http://www.microcappac.org/, welcomed President Bush's nomination of Rep. Christopher Cox (R-Calif.) to be the next Chairman of the Securities and Exchange Commission and urged the new chief to focus on changing the high cost of compliance with the Sarbanes-Oxley Act of 2002 and to take actions to reform outmoded securities laws like the SEC Rule 504 Exemption to help entrepreneurial public companies, or so-called "microcaps," have access to capital. MCPAC is a lobby force for the interests of the nation's 5,000 microcap publicly-traded companies with market capitalization's of less than $250 million. MCPAC is also associated with the National Small Public Company Leadership Council in Washington, D.C.

Source: Microcap Company Political Action Committee

Congressman Cox is considered an ally of business groups and his wide ranging background in a number of areas, including economic issues, provide him the opportunity as incoming chief of the SEC to be a champion of the free enterprise system, said Speight, who also serves as Chairman and CEO of American Capital Partners Limited, Inc. (APRJ), a registered Business Development Company based in West Palm Beach, Fla. "Mr. Cox is well-known for waging an effort to repeal the estate tax and other important reforms and MCPAC is hopeful that he'll recognize the urgent need for reforming other corporate governance issues that are crucial for small emerging growth companies."

MCPAC is eager to improve the dialogue with the SEC and in our work with securities regulators and policy makers we are seeking exemptions from Sarbanes-Oxley for companies with less than $100 million in annual revenues and relax mandates for firms between $100 million and $200 million, said Speight.

In view of Congressman Cox's role early in his career as an advisor to President Ronald Reagan, Speight also called for the SEC Chairman nominee to consider modifying the SEC's Rule 504 Exemption, a Reagan era reform that fueled the small business boom of the 1980s and 1990s.

MCPAC wants to work with the SEC and policy makers to restore Rule 504 to its former parameters, said Speight. These modifications include increasing the annual cap on the money that microcap companies can raise to $2 million, from the former $1 million, he explained. "This change would allow microcap companies the access to the levels of capital they truly need." Another reform MCPAC plans to champion is requiring the SEC to develop an effective mechanism to streamline the process for filing. "MCPAC contends that if a microcap company is current in its SEC filing it should be allowed to file an easy 504 'notification filing' with supporting documentation," said Speight.