US regulators yesterday proposed rules on corporate disclosure and accounting in the wake of the Enron scandal. Separately, the US Federal Energy Regulatory Commission announced a formal investigation into whether Enron and other power marketers manipulated California's electricity or natural gas markets last year.

Changes on disclosure proposed by the Securities and Exchange Commission (SEC) are the first in a series of reforms aimed at helping avoid the surprise revelations that led to the collapse of the seventh-largest US company. The SEC proposed rules calling for accelerated reporting by firms of insider trades in company stock and faster filing of quarterly and annual reports.

The rules would also expand the list of "significant events" requiring notification of the SEC, such as changes in rating agency decisions, obligations that are not currently disclosed and lock-out periods affecting employee stock-ownership plans.

The Financial Accounting Standards Board, which sets accounting standards in the United States, proposed rules to prevent companies from keeping certain special purpose entities off their books. Until now, partnerships in which at least 3 per cent is held independently can be kept off the books. The board wants to raise this threshold to 10 per cent and make sure that any third party stands to lose out first in any losses the entity incurs.

The move by the energy regulator to investigate alleged manipulation of California's power crisis last year marks an important development in one of the many Enron subplots. Enron spent a fortune in campaigning for electricity deregulation in the state. But a recent Senate hearing heard testimony from Mr Robert McCullough, an energy consultant, to the effect that the price of unregulated financial energy contracts on the West Coast dropped 30 per cent on December 3rd, the day after Enron filed for bankruptcy.

This suggests, he said, that "Enron may have been using its market dominance" to set long-term energy prices.