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Capital Markets Law Journal Advance Access originally published online on September 2, 2008
Capital Markets Law Journal 2008 3(4):389-416; doi:10.1093/cmlj/kmn020
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Recent SEC initiatives that should enhance access to the US capital markets by foreign private issuers

W. Clayton Johnson*
* W. Clayton Johnson is a partner of Cleary Gottlieb Steen & Hamilton LLP, based in Hong Kong.

The first 150 words of the full text of this article appear below.


Key points

  • In recent years, non-US companies have been increasingly reluctant to list or publicly offer securities in the United States due in part to perceived US legal and regulatory burdens, including the requirement to file financial statements prepared under, or reconciled to, United States generally accepted accounting principles (GAAP) and the requirements of the Sarbanes–Oxley Act of 2002 (SOX), particularly Section 404 and the related SEC rules regarding internal control over financial reporting (ICFR).
  • The US Securities and Exchange Commission (SEC) has not ignored the decline in competitiveness of the US public securities markets and has stated its commitment to facilitate cross-border capital flows by reducing barriers to US public offerings and listings by non-US companies. Over the years, the SEC has adopted numerous accommodations for the benefit of foreign private issuers (FPIs) from its rules applicable to US issuers.
  • Recently, the SEC has adopted changes to its rules . . . [Full Text of this Article]

 

   1. Introduction
 

   2. Acceptance of financial statements prepared under IFRS without US GAAP reconciliation
 
IFRS reporting without US GAAP reconciliation
IFRS presentation and related disclosures
Transition to IFRS
Acquisition-related issues under IFRS
Jurisdictional variants of IFRS
IFRS as issued by the IASB
The SEC and IFRS
The impact of the SEC's acceptance of IFRS

   3. Changes to SOX Section 404 requirements
 
Background of ICFR
Basic requirements of ICFR
SEC recent changes to Section 404 requirements
SEC rule changes
Revisions to the definitions of ‘material weakness’ and ‘significant deficiency’
Elimination of the requirement for a separate auditor opinion on management's assessment of ICFR
SEC interpretive guidance
SEC guidance regarding management evaluation process
ICFR reporting
New PCAOB Accounting Standard No. 5
Impact of New SEC Section 404 rules, guidance and AS 5

   4. Conclusions
 

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