'Brainy' democrat backs international standards

The chairman of the US House financial services committee has introduced a
British-model bill which will require public companies to include in their
annual proxies a non-binding shareholder vote on their executive pay plans.

Barney Frank, the man who oversees
the SEC – voted by Washingtonian magazine
as Congress’s ‘brainiest’ member – is likely to discuss the subject today at the
annual meeting of the Council of Institutional Investors, the leading US
shareholder rights group.

‘This is one area where we want to emulate the British model that my
corporate friends are less enthusiastic about,’ Frank told the
FT in an
interview.

Frank also put his weight behind efforts to bring US accounting and auditing
standards in line with international standards and is also sympathetic to ease
the burden of Sarbanes-Oxley, with a proposal last week to exempt banks from
s404 provisions because they are subject to similar requirements under earlier
law.

In an interview with the FT, Frank said he did however believe that
regulators were not being credited for their recent revisions of Sarbox, which
make it easier for companies to apply the contentious section relating to
internal controls.

Further reading:

US
Rep. Frank dismisses fear of IPO flight to UK

SEC chairman Cox defends Sarbox

SEC mulls IFRS for non-US firms

He referred to fears of a shift of investment to London at the expense of New
York as ‘overblown.’

‘I think the notion that America is terrible and England is wonderful and
everyone is going there is wrong. People in the corporate community don’t appear
to be able to take “yes” for an answer. [Regulators] are in the process now of
downscaling [Sarbox] and in a few months it won’t be as much of an issue.’

He said the US must adapt regulation of take account of global competition
for capital as physical boundaries are eliminated by technology.

‘Nation-based securities regulation has been outstripped by globalisation.
The fact that Chinese banks decide to do their IPOs in Asia does not seem to me
to be a weakness in the American capital markets. We [in the US] have a national
system of securities regulation in an increasingly transnational world.’