On Thursday July 15th the Senate narrowly approved a major financial regulatory reform package. The legislation was approved by the House on June 30th and President Barack Obama is expected to quickly sign it into law.

The act amends Sarbanes-Oxley (SOX) to make permanent the exemption from its section 404(b) requirement for nonaccelerated filers (those with less than $75 million in market cap) that has temporarily been in effect by order of the SEC. The act also requires the SEC to complete a study within nine months of the act’s enactment on how to reduce the burden of 404(b) compliance for companies with market caps between $75 million and $250 million. The study will consider whether any such methods of reducing the burden, or a complete exemption, would encourage companies to list on exchanges.

The act does not modify requirements under Section 404(a) of SOX, which requires company management to assess the effectiveness of the company's internal controls over financial reporting.

You can read the full text of the act here.

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