General Rules and Regulations
promulgated
under the
Securities Exchange Act of 1934
Rule 15d-15 -- Controls and Procedures
Every issuer that files reports under section 15(d) of the Act, other than
an Asset Backed Issuer (as defined in Item 229.1101 of this chapter), a small business investment company registered on
Form N-5, or a unit investment trust as defined in section 4(2) of the
Investment Company Act of 1940, must maintain disclosure controls and procedures
(as defined in paragraph (e) of this section) and, if the issuer either had been required to file an
annual report pursuant to section 13(a) or 15(d) of the Act for the prior
fiscal year or had filed an annual report with the Commission for the prior fiscal year, internal
control over financial reporting (as defined in paragraph (f) of this section).
Each such issuer's management must evaluate, with
the participation of the issuer's principal executive and principal financial
officers, or persons performing similar functions, the effectiveness of the
issuer's disclosure controls and procedures, as of the end of each fiscal
quarter, except that management must perform this evaluation:
In the case of a foreign private issuer (as
defined in Rule 3b-4) as of the end of each
fiscal year; and
In the case of an investment company registered
under section 8 of the Investment
Company Act of 1940, within the 90-day period prior to the filing date
of each report requiring certification under Investment Company Act Rule
30a-2.
The management of each such issuer, that either had been required to file an annual report pursuant to section 13(a) or 15(d) of the Act for the prior fiscal year or previously had filed an annual report with the Commission for the prior fiscal year, other than an investment company registered under section 8 of the Investment Company Act of 1940, must evaluate, with the participation of the issuer's principal executive and principal financial officers, or persons performing similar functions, the effectiveness, as of the end of each fiscal year, of the issuer's internal control over financial reporting. The framework on which management's evaluation of the issuer's internal control over financial reporting is based must be a suitable, recognized control framework that is established by a body or group that has followed due-process procedures, including the broad distribution of the framework for public comment. Although there are many different ways to conduct an evaluation of the effectiveness of internal control over financial reporting to meet the requirements of this paragraph, an evaluation that is conducted in accordance with the interpretive guidance issued by the Commission in Release No. 34-55929 will satisfy the evaluation required by this paragraph.
The management of each such issuer that previously either had been required to file an
annual report pursuant to section 13(a) or 15(d) of the Act for the prior fiscal year or
previously had filed an annual report with the Commission for the prior fiscal year, other than an investment company
registered under section 8 of the Investment Company Act of 1940, must evaluate, with the participation
of the issuer's principal executive and principal financial officers, or persons performing similar functions, any change
in the issuer's internal control over financial reporting, that occurred during each of the issuer's fiscal quarters, or
fiscal year in the case of a foreign private issuer, that has materially affected, or is reasonably likely to materially
affect, the issuer's internal control over financial reporting.
For purposes of this section, the term disclosure
controls and procedures means controls and other procedures of an issuer that
are designed to ensure that information required to be disclosed by the issuer
in the reports that it files or submits under the Act (15 U.S.C. 78a et
seq.) is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Act is accumulated and communicated to
the issuer's management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.
The term internal control over financial reporting
is defined as a process designed by, or under the supervision of, the issuer's
principal executive and principal financial officers, or persons performing
similar functions, and effected by the issuer's board of directors, management
and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and includes
those policies and procedures that:
Pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the issuer;
Provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that
receipts and expenditures of the issuer are being made only in accordance
with authorizations of management and directors of the issuer; and
Provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use or disposition of
the issuer's assets that could have a material effect on the financial
statements.
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