The long-awaited regulatory reform bill from Sen. Christopher Dodd finally landed with a ponderous thump on desks across Washington, Wall Street and America this afternoon. It clocks in at 1,336 pages, which gives it more physical heft than the reform bill passed by the House (1,289 pages) last December.

The bill will inevitably have more political heft, too, so compliance and governance executives should start giving it a read. (The faint-hearted can start with an 11-page summary the Senate Banking Committee has also posted. You wimps.)

As we’ve all seen from various stories leaked to the media since late last week, the lion’s share of the bill deals revolves around the risk of another large financial firm collapsing as Lehman Brothers did in 2008, and around creation of a Consumer Financial Protection Agency to regulate the financial products sold to the public. Those are complex topics already dissected by other business media elsewhere, so I’ll put them aside for now. We still have plenty of other governance reforms to discuss, so let’s pull out the scalpel and start slicing those into their component parts.

• Self-funding of the SEC (Section 991). Allows the Securities and Exchange Commission to set its own budget, through fees, penalties and other assessments it might impose on SEC registrants. This is the Holy Grail of the commissioners; they have clamored for it for years, and the arguments in favor of a financially independent SEC are compelling. Sen. Chuck Schumer introduced this particular piece of legislation last fall, as well as numerous other governance reforms. The House bill does not include similar language, but it does call for an outside review of SEC operations, including the wonderfully undefined question of “funding.”
• Shareholder proxy access (Section 972). Allows, but does not require, the SEC to adopt a rule allowing shareholders to place nominations for board of directors in the proxy statement. This is the legislative protection the SEC has been wanting, so it can safely proceed with the proxy-access rule it has wanted to pass for months. This is largely in step with language in Section 7222 of the House bill.
• Majority voting in uncontested elections (Section 971). Directs the SEC to pass a rule within one year that orders the stock exchanges to bar any listed companies that don’t require directors to win a majority of votes cast in uncontested elections. (A plurality is still the standard for contested ones.) One caveat: The SEC would have the power to exempt issuers based on size, market capitalization, and so forth, which I presume is to quell the panic non-accelerated filers would have over a rule like this. The House bill does not contain a comparable provision.
• Whistleblower protections (Section 929A). Amends federal law to clarify that yes, whistleblower protections extend even to employees of a public company’s various subsidiary operations. The only stipulation is that the subsidiary’s financial results must be rolled up into the consolidated statements of the parent company. The language does not include any mention either way of employees at foreign subsidiaries. I cannot find any similar language in the House bill.
• Whistleblower rewards (Section 922). Creates a program within the SEC to encourage people to report securities fraud by creating rewards of up to 30 percent of funds recovered based on the information provided. This is similar to the rewards offered under the False Claims Act. It also mirrors language in Section 7203 of the House bill.
• “Comply or explain” for splitting chairman and CEO roles (Section 973). Directs the SEC to pass a rule within six months ordering companies to explain why they do or do not divide the chairman and CEO roles at their company. Since the SEC has already passed other proxy disclosure reforms requiring essentially the same thing, this seems like a moot point to me.

For non-accelerated filers, however, the most important part of the Dodd bill is what is not included: There is no proposal to exempt small public companies from Section 404(b) of the Sarbanes-Oxley Act.

Prudent CFOs at non-accelerated filers should begin panicking now. Yes, a 404(b) exemption is included in the House bill, but Dodd’s bill in the Senate still faces a long, hard legislative slog in coming weeks.

I assume Dodd knows how to pull together the 60 votes he will need to overcome a Republican filibuster, but he will need every single Democrat and at least one Republican to do it—and so far, no Republicans have stepped up to support the bill. The screeching political fights ahead will all deal with the Consumer Financial Protection Agency, expanded powers to the Federal Reserve, new regulation of derivatives trading, and the like. Nobody is talking much about excusing small companies from Section 404(b), since it truly is a relatively obscure matter in the vast sweep of regulatory reform.

Meanwhile, the SEC’s deadline for Section 404(b) compliance—annual reports for fiscal years ending on or after June 15, 2010—now looms less than three months away. If the Dodd bill collapses into chaos or simply ignores the issue, non-accelerated filers could have a nasty surprise in store for them.