UK: Sarbanes-Oxley Act - Impact Outside the United States
Last Updated: 29 August 2002

About half of the UK’s FTSE 100 companies may be affected by the recently signed Sarbanes-Oxley Act, according to international law firm Freshfields Bruckhaus Deringer.

The Act is one of the most significant pieces of US securities legislation since the 1930s and will impose new obligations on non-US companies which have shares listed on a US stock exchange or quoted through Nasdaq. The statute will also subject these companies’ executives to strict civil and criminal penalties if they are guilty of violations of the Act.

"The most pressing issue regarding the Act for non-US SEC reporting companies lies in the scope of the certification provisions," said Tom Joyce, partner with Freshfields Bruckhaus Deringer.

"The Act requires the SEC to finalise rules regarding certification of periodic reports, including financial statements, by 29 August. The SEC has said it will apply the certification requirement to all SEC companies, including those based outside the United States. CEOs and CFOs will have to certify all annual reports on Form 20-F filed after 29 August - whether or not they will also have to certify periodic reports submitted on Form 6-K remains to be seen," Joyce said.

"The full implications of the Act for non-US companies should become clearer over the next nine months as the SEC finalises implementation rules for the Act. Some reports have indicated that the SEC will exempt non-US companies from some provisions of the Act, but the SEC said in their release on the certification of periodic reports that they will hold non-US companies to strict standards. Application of the Act to non-US companies is likely to be a focus of debate as the SEC disseminates rules in coming months," Joyce added.


Notes for Editors

Freshfields Bruckhaus Deringer is a leading international law firm. With 506 partners and more than 2400 lawyers in 29 offices around the world, it provides a comprehensive worldwide service to national and multinational corporations, financial institutions and governments.

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