**GAO-02-1108R**                      Sep 26, 2002                  

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## Highlights

GAO reviewed the Securities and Exchange Commission's (SEC) new rule on periodic report filing dates. GAO found that (1) the rule would accelerate the filing of annual and quarterly reports by domestic reporting companies that have a common equity float of at least $75 million, and (2) SEC complied with applicable requirements in promulgating the rule.

##  Securities and Exchange Commission: Acceleration of Periodic Report Filing Dates and Disclosure Concerning Web Site Access to Reports, GAO-02-1108R, September 26, 2002

B-291306September 26, 2002The Honorable Paul S. Sarbanes     Chairman     The Honorable Phil Gramm     Ranking Minority Member     Committee on Banking, Housing, and Urban Affairs     United States SenateThe Honorable Michael G. Oxley     Chairman     The Honorable John J. LaFalce     Ranking Minority Member     Committee on Financial Services     House of Representatives     Subject:Securities and Exchange Commission: Acceleration of Periodic Report Filing Dates and Disclosure Concerning Web Site Access to    ReportsPursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Securities and Exchange    Commission (SEC), entitled Acceleration of Periodic Report Filing Dates and Disclosure Concerning Web Site Access to Reports (RIN: 3235-AI33).  We received the rule on    September 6, 2002.  It was published in the Federal Register as a final rule on September 16, 2002.  67 Fed. Reg. 58480.     The final rule accelerates the filing of annual and quarterly reports by domestic reporting companies that have a common public equity float of at least $75 million, that have been subject to    the Securities Exchange Act's reporting requirements for at least 12 months, and have filed at least one annual report.  The changes in the filing deadlines will be phased in over 3    years.     Enclosed is our assessment of the SEC's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.  Our review indicates that    the SEC complied with the applicable requirements.     If you have any questions about this report, please contact James W. Vickers, Assistant General Counsel, at (202) 512-8210.  The official responsible for GAO evaluation work relating to the    subject matter of the rule is Tom McCool, Managing Director, Financial Markets and Community Investments.  Mr. McCool can be reached at (202) 512-8678.                 signed     Kathleen E. Wannisky     Managing Associate General Counsel     Enclosure     cc:       Margaret H. McFarland           Deputy Secretary           Securities and Exchange Commission            ENCLOSURE     ANALYSIS UNDER 5 U.S.C.  801(a)(1)(B)(i)-(iv) OF A MAJOR RULE     ISSUED BY THE     SECURITIES AND EXCHANGE COMMISSION     ENTITLED     "ACCELERATION OF PERIODIC REPORT FILING DATES AND DISCLOSURE CONCERNING WEB SITE ACCESS TO REPORTS"     (RIN: 3235-AI33)(i) Cost-benefit analysis     The Securities and Exchange Commission states that it has limited data on which to base the cost estimates of the final rule.  However, using cost estimates from a survey based on the    original proposed rule conducted by the American Society of Corporate Secretaries, the SEC arrived at the following median costs of the final rule.  The initial costs are estimated to be    $298,625,000, and the ongoing, annual costs are estimated to be $247,230,000.     The benefits are that the final rule will deliver information to investors and the capital markets faster thereby enabling them to make informed investment and valuation decisions more    quickly.(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C.  603-605, 607, and 609     The SEC prepared an Initial and Final Regulatory Flexibility Analysis in connection with the proposed and final rules, respectively.  The analyses meet the informational requirements of the    Act.     SEC notes that the public float requirement will have the effect of almost completely excluding all small entities from the final rule.(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.  1532-1535     As an independent regulatory agency, the SEC is not subject to title II of the Unfunded Mandates Reform Act.(iv) Other relevant information or requirements under acts and executive orders     Administrative Procedure Act, 5 U.S.C.  551 etseq.     The final rule was issued using the notice and comment procedures contained at 5 U.S.C. 553.  On April 23, 2002, the SEC published a Notice of Proposed Rulemaking in the Federal    Register.  67 Fed. Reg. 19896.  SEC received 305 comments in response to the proposal, which are discussed in the preamble to the final rule.     Paperwork Reduction Act, 44 U.S.C.  3501-3520     The final rule contains information collections that are subject to the review and approval of the Office of Management and Budget under the Paperwork Reduction Act.     The preamble to the final rule contains the information regarding the collections required by the Act and responds to the comments received in connection with the proposed rule, which resulted    in revising the annual burden.     SEC estimates that Form 10-K results in a total annual compliance burden of 12,107,420 hours and an annual cost of $1,210,742,025 and Form 10-Q results in an total annual compliance burden of    2,728,092 hours and an annual cost of $272,809,200.     Statutory authorization for the rule     The final rule is promulgated pursuant to the authority contained in sections 3(b) and 19(a) of the Securities Act and Sections 12, 13, 15(d), and 23(a) of the Exchange Act.     Executive Order No. 12866     As the rule is promulgated by an independent regulatory agency, it is not subject to the review requirements of the order.

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