'Cooperation with SEC is possible'

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The appearance of the US Securities & Exchange Commission’s chairman ensured virtually every seat was taken, leaving the media hordes to huddle at the back of the hall.

And the crowd was not disappointed as the larger than life lawyer strode to the stage to start a bidding war over corporate governance legislation.

Although UK ministers sought to play down Pitt’s intentions, it was clear he wanted Europe to back down on its own ‘extra-territorial’ proposals.

‘The EC would do well to ward against the possible extraterritorial imposition of standards on US firms in the form of “equivalence” determinations,’ he said as he attacked EC proposals on consolidated supervision of financial conglomerates.

The message was clear – in considering exemptive relief for non-US companies and auditors operating under the new Sarbanes-Oxley Act, Pitt stressed ‘reciprocity is critical’.

After his speech at the conference, Pitt re-iterated his concern. ‘Finding a consistent approach is critical,’ he said.

But Melanie Johnson, the UK trade minister, played down the move.

‘I don’t think we are into trading on this. We’re into sensible adult discussion. We have robust standards here,’ Johnson told Accountancy Age after addressing the Brussels conference.

But the wry grins on delegates’ faces suggested otherwise. The delegates should have taken away with them the belief that Pitt was prepared to listen to their concerns. But they might have been concerned when Pitt confirmed afterwards that the SEC was ‘duty bound to implement the letter and spirit of the legislation’.

Putting it even more bluntly, Pitt said: ‘It is the law.’ Prior to addressing the ICAEW conference, Pitt had been in talks with Frits Bolkestein, the EU Commissioner for internal markets.

Bolkestein said: ‘We have too much in common to fail to co-operate.’ He said he had been very encouraged by discussions with Pitt, but conceded: ‘He will be sick of hearing about our problems with Sarbanes.’

Pitt said the talks had been ‘broad-ranging’. ‘We agreed it was important for us to continue a dialogue and to have our staff sit down and understand the precise issues and precise problems.’

Johnson was relaxed with what she had heard from Pitt. ‘The mood music is that co-operation is possible,’ she said.