Financial Disclosure Review

Floor Speech

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Mrs. WAGNER. Mr. Speaker, the Securities and Exchange Act of 1934 requires most SEC registrants to file a form 10Q quarterly report with the SEC. The form 10Q includes condensed financial information and other data prepared by a company and reviewed by independent auditors.

Although technology has evolved rapidly over the years, the form 10Q used today was adopted in 1950. My legislation, H.R. 5970, the Modernizing Disclosures for Investors Act, requires the Securities and Exchange Commission, the SEC, to report to Congress the costs and benefits of form 10Q and recommendations for decreasing costs while increasing transparency and efficiency of quarterly financial reporting.

Specifically, my bill requires the SEC to look at emerging growth companies that are particularly susceptible to the burdens and complexities associated with current reporting requirements. In recent years, annual and quarterly reporting requirements have grown in size and complexity, making it more difficult for investors to determine relevant information, often leaving them overwhelmed and unable to make sound investment decisions.

Furthermore, some companies believe that current reporting requirements have become a barrier to registering as publicly traded companies, as noted by a 2011 report by the IPO Task Force. The report, which was prompted by the JOBS Act of 2012, found that 92 percent of public company leaders said that the administrative burden of public reporting was a significant challenge to completing an IPO and becoming a public company.

Finally, I would like to note that my legislation is timely. At a recent SEC oversight hearing, Chairman Clayton highlighted in his testimony that: ``We should regularly review whether we have disclosure requirements that are outdated, duplicative, or can otherwise be improved.''

In addition, just last week, the SEC finalized a rule expanding the definition of smaller reporting companies, which will allow them to be eligible for scaled disclosures.

Before I conclude, I want to take a minute to thank Congressman Gottheimer for his willingness to work across the aisle and to get this bill to the finish line. With the passage of H.R. 5970 just last evening, we have provided yet another example of how Congress can work together in a bipartisan manner.

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