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SEC to relax regulations for non-US issuers

After pressure from a number of top multinationals around the regulations for listing and de-listing in the US, William Donaldson, chairman of the Securities and Exchange Commission (SEC), has said he would like to see the SEC consider providing relief for foreign private issuers. In a speech given Jan. 25 2005 at the London School of Economics and Political Science in London, UK, Donaldson made three recommendations. The three primary recommendations he made are for SEC to:

  • consider new approach to allow more flexibility in deregistration process for foreign private issuers.

  • consider adopting a proposal [note: previously issued proposal available here] to allow first time users of International Financial Reporting Standards (IFRS) to reconcile their financial statement to U.S. GAAP for only two years (as opposed to existing 3 year requirement)

  • consider whether to further delay compliance date of internal control reporting requirements for non-U.S. companies (i.e., SEC requirement for management report on internal control over financial reporting as set forth under Sarbanes-Oxley Section 404)

Excerpts of his speech, provided by the Financial Executives International (FEI) in these three areas are provided below. "First, I expect the SEC to consider whether there should be a new approach to the deregistration process for foreign private issuers if they do not feel prepared to meet the U.S.requirements.

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