Section 408 -- Enhanced Review of Periodic Disclosures by Issuers
Regular and Systematic Review. The Commission
shall review disclosures made by issuers reporting under section 13(a) of
the Securities Exchange Act of 1934 (including reports filed on Form
10-K), and which have a class of securities listed on a national securities
exchange or traded on an automated quotation facility of a national securities
association, on a regular and systematic basis for the protection of investors.
Such review shall include a review of an issuer's financial statement.
Review Criteria. For purposes of scheduling
the reviews required by subsection (a), the Commission shall consider, among
issuers that have issued material restatements
of financial results;
issuers that experience significant volatility
in their stock price as compared to other issuers;
issuers with the largest market capitalization;
emerging companies with disparities in price
to earning ratios;
issuers whose operations significantly affect
any material sector of the economy; and
any other factors that the Commission may
Minimum Review Period. In no event shall
an issuer required to file reports under section 13(a)
or 15(d) of the Securities Exchange Act
of 1934 be reviewed under this section less frequently than once every 3 years.
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