A key Senate committee has passed sweeping financial reform legislation, advancing the Dodd regulatory bill for consideration by the full Senate, moving lawmakers a small step forward in their effort to overhaul the U.S. regulatory system.

The Senate Banking Committee on Monday evening voted 13-10 along party lines to approve the controversial reform bill put forth by committee Chairman Chris Dodd (D-Conn.) without any Republican support.

Rather than offering a slew of amendments during the March 22 mark up, the committee's Republican members decided to hold their amendments until the massive reform bill, "Restoring American Financial Stability," which spans more than 1,300 pages, comes up for a vote before the full Senate.

In remarks during the brief markup, Ranking Committee member Richard Shelby (R- Ala.) said, "It is not our intention to turn this markup into a long march, offering hundreds of amendments that will inevitably be defeated. We don't think that would be constructive or productive."

Shelby ticked off a long list of issues Republicans want to see addressed in any final bill. Among them are the proposed Consumer Financial Protection Agency, new rules to regulate over-the-counter derivatives, corporate governance provisions he said, "would impose costs on shareholders and empower special interests," and provisions related to credit rating agencies, securitization, and Securities and Exchange Commission funding, which he said, as drafted, "would not solve the problems they attempt to address."

Among other items, Corporate America is waiting to see whether the Senate will deliver an exemption for non-accelerated filers from compliance with Section 404(b) of the Sarbanes-Oxley Act, the portion that requires companies to have an outside auditor sign off on their internal controls over financial reporting.

As previously noted, South Carolina Republican Jim DeMint is expected to introduce an amendment that would exempt small public companies from 404(b).

A provision that would exempt public companies with market capitalizations below $75 million from Section 404(b) made it into the final House reform bill passed in December. Unless the Senate acts (or the SEC, which seems unlikely) those companies are slated to begin complying with the measure for fiscal years ending on or after June 15, 2010.

Meanwhile, the bill's final fate remains unclear. Lawmakers are expected to file hundreds of amendments to the current draft, so any final version could look vastly different from the one unveiled March 15. The legislation would need 60 votes to clear the Senate, and even then, both chambers would still need to reconcile their differences and approve a final bill to be signed by the President.

Compliance Week will continue to provide readers with ongoing coverage of the financial reform legislation as it progresses.

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