Small public companies got a break earlier this month when the SEC issued its third compliance deadline delay for small businesses. The delay, another recognition of the overbearing regulations it imposes on small companies, was granted with a stern warning from SEC Chair Mary Schapiro, "[T]here will be no further Commission extensions."

With little hope for pushing the deadline further, House Legislators are now trying to extend more relief by proposing the SEC and the Government Accountability Office conduct separate cost-benefit studies of 404 compliance for SMBs before holding the smaller businesses responsible for compliance, according to Compliance Week's Melissa Aguilar.

The amendment, proposed by Rep. Carolyn Maloney, D-N.Y., passed the House Financial Services Committee and will go before the full committee for a vote on Wednesday, Nov. 4. Another proposal from Rep. John Adler, D-N.J., would have exempted all companies with less than $700 million in market capitalization from 404(b) compliance, but was shot down in a preliminary vote, Aguilar said.

Sarbox is credited with many VCs for effectively closing off the IPO exit stream. The regulation is something of a sledgehammer: good for banging huge corporations back into shape, but fatal when applied to smaller organizations--like tech startups hoping to go public. The regulation has practically doubled the time and money needed for a startup to go public, and is partly blamed for recent poor returns from the venture capital asset class.