Section 403 of the Sarbanes-Oxley Act of 2002, signed by President Bush on July 30, 2002, amended Section 16(a) of the Securities Exchange Act of 1934 to drastically reduce the statutory time period for public company executive officers, directors and 10% owners to report transactions and changes in ownership. The amendment is to be effective 30 days after enactment of the Act.

Currently, Section 16(a) requires reports (e.g., Form 4) within 10 days after the close of the month in which the transaction or change in ownership occurs. As amended, Section 16(a) requires such reports to be filed “before the end of the second business day following the day on which the subject transaction has been executed, or such other time as the Commission shall establish, by rule, in any case in which the Commission determines that such two-day period is not feasible.”

It is not known at this time whether the SEC will adjust the two-day period prior to effectiveness of the amendment.

For more information concerning the Sarbanes-Oxley Act of 2002 and its impact on your business, please contact Charles J. Ferry, Dean H. Dusinberre, or Paul F. Wessell at (717) 233-5731.

August 2, 2002                   

The information contained in this article is provided for general informational purposes only and should not be construed as legal advice. It is a summary only and may not be complete. Making this article available does not create nor constitute any attorney-client relationship.