New Year regulations
Every January, it is common for people to consider the events of the year just ended and to make resolutions for the year to come. New Year resolutions ranging from ‘I will get a new job’ to ‘I will give up smoking’ will be made. Sometimes these resolutions are even kept! This January many in the financial world will be contemplating the year ahead with an element of apprehension.
It is not only concerns over the strength of the global economy. This year we need to be aware of the development of the New Year regulations. The European Commission is trying to develop conditions in which a genuine single European market in financial services can develop. There is also concern over the continuing fall-out from US corporate scandals.
Last summer’s Sarbanes-Oxley Act was enacted to try to protect the interests of investors. The legislation, criticised for being rushed through Congress, covers a lot of ground. For example, it restricts the activities that an audit firm can perform for its clients; it formalises the roles that CEOs and CFOs have to play in certifying their companies’ accounts; and it raises the maximum penalties for committing a range of ‘white-collar crimes’.
What is still not clear is how the Sarbanes-Oxley Act will affect European companies and, in particular, those European companies that have a listing in the US. The Sarbanes-Oxley Act gave the Securities and Exchange Commission (SEC) the responsibility to develop a set of rules and regulations that will implement the act. These will be finalised by 26th January. It is worth contacting your lawyers or your accountants on or around that date to see how the US legislation will affect you.
We’ll be keeping a close eye on the regulatory authorities on both sides of the Atlantic and reporting back to you throughout 2003.
In the meantime, all of us at Treasury Today would like to wish all our readers a happy and prosperous New Year.