|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
Moves At SEC To Loosen Rules On Many Companies
Staff Writer
New York Times. December 15, 2005
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EXCERPT: In strong moves to reduce the burden of securities regulations, the Securities and Exchange Commission proposed rules yesterday to make it easier for foreign companies to get out from under such regulations, while an advisory panel put forward guidelines that would exempt 80 percent of American companies from having to comply fully with the Sarbanes-Oxley Act. The moves sent a signal that regulators were worried about complaints made by many companies regarding costs. Christopher Cox, chairman of the S.E.C., said he hoped new rules would encourage foreign companies to list in the United States since they would know it would be relatively easy to leave if they chose. The proposed rule, which could be changed after public comments are received, stopped well short of a request by a large group of European companies that they be able to deregister if their trading volumes in the United States were low. ''There are companies that have relatively low U.S. trading volume, but relatively high U.S. ownership,'' said Alan Beller, the director of the commission's division of corporate finance, adding that those companies should remain registered. The recommendation on the Sarbanes-Oxley provision came from the S.E.C.'s advisory committee on small business. It voted to ask the commission to allow most companies with market values of less than $700 million to avoid having their internal controls certified by auditors. The vote was 18 to 1, with the dissenting member, Kurt Schacht, the executive director of the CFA Centre for Financial Market Integrity, saying, ''It is clear that we need to do something for small companies, but giving them a pass on any verification and oversight of internal controls will come back to haunt us.'' Backers of the proposal said the costs of compliance were too high. ''We value internal controls strongly,'' James C. Thyen, chief executive of Kimball International and co-chairman of the advisory committee, said in a telephone interview. ''We see the goodness in it, but we think there has to be some proportionality in costs versus benefits.'' Under the proposal, his company would no longer need to have its controls audited. Regarding foreign companies, the proposed S.E.C. rule would allow them to leave if less than 5 percent of the trading volume of their stock takes place in United States markets, but only if less than 10 percent of the shares are owned by residents. If the figure is less than 5 percent, the company may leave the market no matter how large the volume. |
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