SEC Proposes Amendments and Issues Guidance on Sarbanes-Oxley Certifications

• would require companies to file the certifications required by Sections 302 and 906 of Sarbanes-Oxley as exhibits to the periodic reports to which they relate and
• offers "interim guidance" on how certifications required by Section 906 of Sarbanes-Oxley should "accompany" a periodic report.

Comments on the proposed rules are due 45 days after they are published in the Federal Register.

Proposed Amendment to Section 302 Certifications

Under the existing SEC rules regarding the Section 302 certifications, the certifications are required to appear in each quarterly or annual report immediately following the "Signatures" section of the report. The SEC proposes to amend this requirement to require the Section 302 certifications to be filed as exhibits (under new Exhibit 31) to the report to make it easier for the SEC and investors to locate and review the certifications. The proposed amendment only changes the location of the Section 302 certifications; it does not make any substantive changes to the text of the certifications or alter the consequences for failing to file the certifications or for filing a false or misleading certification. The SEC has proposed substantive changes to the text of the Section 302 certifications in separate rulemaking related to the SEC’s proposed rules implementing Section 404 of Sarbanes-Oxley regarding the internal controls report.

Proposed Amendment to Section 906 Certifications

The certifications required by Section 906 of Sarbanes-Oxley did not originally require any SEC rulemaking and the SEC indicated that it would not propose rules clarifying this requirement because the act did not give the SEC authority to do so. However, in coordination with the Department of Justice, the SEC is proposing rules that would require the Section 906 certifications to be filed as exhibits (under new Exhibit 32) to the periodic reports to which they relate.

Section 906 of Sarbanes-Oxley requires that the certifications required thereby "accompany" any periodic report that contains financial statements, but did not give issuers any guidance on what "accompany" meant. Many issuers filed the Section 906 certifications as exhibits to the periodic report. Other issuers filed the Section 906 certifications as correspondence with the filing and then filed the text of the certifications on a Form 8-K to make the certifications publicly available. The SEC proposal would require issuers to file the Section 906 certifications as exhibits to the periodic report to enable the SEC, investors and the Department of Justice to monitor compliance with this certification requirement.

The SEC explicitly acknowledged that there only needs to be one Section 906 certification that is signed by both the principal executive officer and principal financial officer as opposed to the Section 302 certifications, which require the principal executive officer and principal financial officer to each sign a separate certification.

A Section 906 certification only needs to "accompany" the report and does not need to be "filed." Therefore, the proposed rules will require issuers to "furnish" rather than "file" the certification. The proposed rule will provide that the certification would not be subject to liability under Section 18 of the Exchange Act and would not be incorporated automatically into registration statements.

Interim Guidance on Section 906 Certifications

Until the final rules become effective, the SEC encourages issuers to submit Section 906 certifications as exhibits to the periodic reports as Exhibits 99 under Item 601(b) of Regulation S-K. For reports filed electronically, issuers should retain a manually signed copy of the certification. In addition, issuers should insert the following legend after the text of the certification(s):

"A signed original of this written statement required by Section 906 has been provided to [name of issuer] and will be retained by [name of issuer] and furnished to the Securities and Exchange Commission or its staff upon request."

Below is a form of Section 906 certification that complies with the SEC’s interim guidance:

EXHIBIT 99.___

CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of [COMPANY].

A signed original of this written statement required by Section 906 has been provided to [COMPANY] and will be retained by [COMPANY] and furnished to the Securities and Exchange Commission or its staff upon request.

[CEO Name]

[CEO Title]

[CFO Name]

[CFO Title]