(The news featured below is a selection from the news covered in the Federal Securities Report Letter, which is distributed to subscribers of the Federal Securities Law Reports.)

SEC Staff Issues Advice on CEO, CFO Certification

The SEC listed the 947 companies whose top officials are required to file sworn statements attesting to the accuracy of the companies’ most recent annual and quarterly financial reports. The agency also advised that the written certification statements will be posted on the agency’s Web site. Initial certifications of quarterly reports will be due from many of the listed companies by August 14, 2002.

Staff Answers Frequently-Asked Questions

The SEC staff posted answers to several frequently-asked questions concerning the certification procedure. Initially, the staff advised that corporate officers may not make a joint certification statement, as each principal executive officer and principal financial officer must provide a separate written statement.

With regard to the due date for statements concerning reports filed on or after August 14, 2002, the staff advised that the statements are due on the same date as the subject report. If the company received a filing extension, such as under Exchange Act Rule 12b-25, that extension would also extend the deadline for compliance with the certification order. All certification statements must be delivered in written form on paper, even if the underlying report is filed electronically through EDGAR. Statements may be hand-delivered, mailed or faxed to the Commission.

In response to a question concerning a change in management personnel since the company filed its most recent Form 10-K or any subsequent covered report, the staff advised that the current officers should issue the statements. Such certifications should be based on their personal knowledge of the previous report.

The staff emphasized that the Commission order requires the officers to file the written statement exactly as specified in the order. According to the staff advice, if the certification wording is changed, the statement will be construed as a filing "describing the facts and circumstances that would make such a statement incorrect."

In response to a question concerning current reports on Form 8-K, the advised that such forms "furnished" for Regulation FD purposes rather than filed are not covered reports and would not require a certification statement. The staff noted, however, that if an issuer chooses to file the information under Item 5 of Form 8-K, states that it is "filed" under Item 9 of Form 8-K or incorporates it by reference into a filing under either the Securities Act or the Exchange Act, the Form 8-K would be a covered report.

Form 8-K and Web Site Disclosure

Noting that the certification statements would "be nearly certain to be material information regarding the companies," the staff advised that these statements should, until publicly disclosed, be handled in the same manner as all other material non-public information. The staff added that "in light of the almost certain materiality of the information and the companies’ need to avoid possible misuse of such information, we believe that the best course of action would be for the companies, in addition to filing the sworn statements under the order, to file an Item 9 or Item 5 current report on Form 8-K when the statements are completed and signed, disclosing the filing of the statements and attaching the statements as exhibits to the Form 8-K." Additionally, advised the staff, companies should post the statements on their Web sites and should "take whatever additional steps that they otherwise consider appropriate to ensure broad dissemination of the statements."