Foreign companies hit by new rules
Controversial rules forcing directors of foreign companies with a US listing to certify their accounts were passed by the Securities & Exchange Commission yesterday.
Despite intensive lobbying by non-US business leaders including Britain’s US ambassador, the rules, which will come into force tomorrow, were passed unanimously by the SEC.
The rules, part of the Sarbanes-Oxley Bill signed by President Bush last month, represent an increase in the SEC’s ‘extra-terratorial’ powers and, according to the Confederation of British Industry, could hit the recruitment of non-execdutive directors in the UK.
According to Digby Jones, CBI director-general, the increase in personal liability for UK directors could discourage directors taking on any additional risk.
But public comments from many UK companies with a US listing suggest there are few concerns over the additional reporting burden.