| Tags |
Sarbanes Oxley
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| Year | 2007 |
| Publisher | Practical Law |
| Volume | 53 |
| Description | Globalization is changing the way financial markets operate. Today more than ever, stock markets are inextricably intertwined. A change in the legal landscape of one country can have significant repercussions in other countries. A striking example of this phenomenon is the Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745, July 30, 2002, 15 U.S.C. §7201 et seq. (“Sarbanes-Oxley) enacted by Congress to restore investor confidence and curb various corporate excesses. The extensive reach of the Act has had a significant effect not only in the United States, but also in international securities markets in which the United States is a dominant player. However, that effect has not generally been a positive one. Since the Act does not contain an express exemption to foreign private issuers, it also applies to non-U.S. issuers that are required to file annual Form 20-F or Form 40-F reports, as well as companies that register their securities for sale in the United States (including through the use of the American Depositary Receipt program). Multinational groups listed on U.S. stock exchanges are, therefore, required to set up specific procedures in their subsidiaries located outside the United States and notably in Europe. A major challenge encountered by multinational groups was the implementation of the whistleblowing provisions of the Sarbanes-Oxley Act (section 301), which require the audit committees of each firm to establish mechanisms for the “receipt, retention and treatment of anonymous employee concerns about questionable accounting or auditing matters (“whistleblower hotlines). See 15 U.S.C. §78j-1(m)(4). (Description from Source) |