ICI Urges SEC to Address Corporate Financial Reporting

Washington, DC, May 21, 2002 - In a comment letter recently submitted to the SEC, the Institute urged the SEC to adopt rules requiring all earnings announcements by companies reporting under the Securities Exchange Act of 1934 to be filed with the SEC on Form 8-K, and requiring that these Form 8-K filings include a reconciliation to GAAP-basis earnings. The rules should be adopted irrespective of whether or not it shortens the filing deadlines for Forms 10-K and 10-Q, according to the Institute.

The Institute made its comments in response to an SEC proposal to accelerate the filing of quarterly reports and annual reports under the Securities Exchange Act of 1934. The proposal, which is part of a package of proposals designed to improve the corporate disclosure and financial reporting system, specifically would reduce the time period for filing quarterly reports on Form 10-Q from 45 to 30 calendar days after the end of an issuer's quarter, and reduce the time for filing annual reports on Form 10-K from 90 to 60 days after the end of its fiscal year.

In its comments, the Institute states that the SEC's proposal would be "partially responsive to the `gap' that frequently exists between the release of earnings announcements and the filing of periodic reports under the 1934 Act," but recommends a more effective way for the SEC to respond.