Compliance Newsflashes: SEC Eases Up on SOX for Small and Foreign Companies, and more

SEC Offers Further Relief From SOX Section 404

The Securities and Exchange Commission granted smaller public companies and many foreign private issuers further relief from compliance with Section 404 of the Sarbanes-Oxley Act.

The Commission extended multiple deadlines associated with reporting on internal controls and financial reporting for smaller public companies. Deadlines were also extended for certain categories of foreign private issuers. The commission estimates that about 60 percent of foreign private issuers benefit from the deadline extensions.

Newly public companies have also been provisioned for, with the SEC offering transition relief that would apply to any company that has become public through an IPO or a registered exchange offer, or that otherwise becomes subject to the Exchange Act reporting requirements. The Commission is proposing to amend its rules so that a company would not be required to provide either a management assessment or an auditor attestation report until it has previously filed one annual report. This relief is being proposed in recognition of the fact that preparation of a newly public company's first annual report can be a time and resource intensive process that may quickly follow an IPO or initial listing.

Kingston Partners with Safend for Mobile Data Solution

Safend, a provider of endpoint security solutions, announced a partnership with Kingston Technology Company, Inc., pairing Safend's protection with Kingston's DataTraveler Elite - Privacy (DTEP) encrypted drives. By creating a combined security solution, Safend and Kingston offer small-to-medium businesses the advantages of mobile computing without sacrificing data security. The companies have chosen Zones Inc., a technology reseller and Microsoft Partner, to market the pilot security package.

"We're thrilled to contribute to this pilot product," said Gil Sever, Safend's CEO, in a release. "Combining Safend's ironclad port protection with Kingston's encrypted removable storage offers SMB's the efficiency of data mobility as well as tamper-proof access control."

The MSRP for the Kingston-Safend solution is $825 and includes five Kingston DTEP 1GB drives and 25 user licenses for the limited edition of the Safend Protector. The Safend Protector includes a built-in, pre-defined policy that grants full access to company PCs and laptops by using Kingston's encrypted drives while restricting all other USB drives to 'read only' access. Kingston's DTEP drive is a USB Flash drive that secures data on-the-fly via 128-bit AES hardware-based encryption and is complex password protected.

"Port management software is invaluable in protecting systems from unauthorized access but once data leaves the secured network it's vulnerable," said Mark Leathem, director, Flash business development, Kingston, in the release. "Managers can deploy this product right out of the box, knowing that information is secured both inside the company walls and on the road."

FrontLine Compliance Introduces New Service for Hedge Funds

FrontLine Compliance, LLC (FLC), a securities compliance services firm, released the new FLC Hedge Fund Edge service to help managers comply with the new impending legislation and be prepared for regulatory scrutiny.

This collection of custom policies and procedures is designed to prevent, monitor for, and detect potential risk exposures in hedge funds and focuses on valuation risk, trading risk, conflicts of interest, and code of ethics/employee trading, areas flagged as high-risk by securities regulators.

"These are confusing times for hedge fund managers. That makes compliance especially difficult, even for the most diligent manager. Because every firm's needs are unique, we developed this program as a customized solution to streamline the process and help our clients be fully compliant. This is especially critical while the regulatory environment remains unsettled and will inevitably change," said Amy Lynch, FLC president, in a release. "When the SEC issues its guidance, it will most likely be very broad in scope. That means each firm still determines how the implementation will work. The FLC Hedge Fund Edge will help eliminate the guessing game, thus making the process easier to implement and manage."

FrontLine Compliance assists broker-dealers, investment advisers, investment companies, hedge funds, and insurance companies in areas of compliance administration and cost reduction.