The Sarbanes-Oxley Act and non-US issuers: Considerations for international companies

Journal of Commercial Biotechnology

Volumn 10, Issue 1, 2003, Pages 40-53

  Gates, Megan N ^a  

^a Mintz Levin Cohn Ferris   (United States)

Author keywords

Audit committee; Auditors; Certification; Corporate governance; Financial statements; GAAP; Management's discussion and analysis; Sarbanes Oxley Act of 2002; Securities and Exchange Commission

Indexed keywords

ARTICLE; COMMERCIAL PHENOMENA; CRIMINAL BEHAVIOR; ETHICS; FINANCIAL MANAGEMENT; GEOGRAPHIC DISTRIBUTION; GOVERNMENT; HUMAN; INDEPENDENCE; INTERPERSONAL COMMUNICATION; LAW; MARKET; PRACTICE GUIDELINE; UNITED STATES;

EID: 3042811898     PISSN: 14628732     EISSN: None     Source Type: Journal    
DOI: 10.1057/palgrave.jcb.3040054     Document Type: Article

References (18)

1. The Act does not contain any provisions that are specifically targeted to companies in certain industries, such as biotechnology companies. However, as noted in the text, there may be steps that international biotechnology companies, in particular, may wish to take now in order to respond fully to some of the new requirements of the Act, such as the periodic report certification requirements.
2. Rule 12g3-2(b), which requires submission of certain information to the SEC, permits nominal activities in the US capital markets without triggering registration requirements or subjecting companies to periodic reporting obligations under Section 12 of the Exchange Act. A company that furnishes information to the SEC pursuant to Rule 12g3-2(b) of the Exchange Act is not considered to be a reporting company for most purposes of the Exchange Act.
3. Speech to the Practising Law Institute's Annual Institute on Securities Regulation, 6th November, 2002.
4. SEC Interpretive Release, 'Management's Discussion and Analysis of Financial Condition and Results of Operations', Release Nos 33-6835; 34-26831; IC-16961; FR-36, 18th May, 1989.
5. These final rules are available on the SEC's website at URL: http://www.sec.gov/rules/final/33-8182.htm
6. These final rules are available on the SEC's website at URL: http://www.sec.gov/rules/final/33-8176.htm
7. A non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that:
8. The SEC suggests, but does not require, that companies provide website access to this information for at least 12 months.
9. The SEC noted that management's belief as to the usefulness of the non-GAAP financial measure to investors cannot be based solely on the fact that the measure may be used by or useful to securities analysts. Management must present an independent, substantive justification for the use of the measure.
10. See a discussion of the Section 906 certification requirements in the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, 2nd August, 2002, Advisory, entitled 'Update on the Sarbanes-Oxley Act,' and the 12th September, 2002, Advisory, entitled 'Update on the Sarbanes-Oxley Act (Fourth in a Series): SEC Finalizes Certification Rules for Quarterly and Annual Reports,' both of which are available on the website at URL: http:// www.mintz.com/images/dyn/publications/ SECAdv080202.pdf and at URL: http:// www.mintz.com/images/dyn/publications/ SECAdvisory91202.pdf, respectively.
11. These final rules are available on the SEC's website at URL: http://www.sec.gov/rules/final/33-8238.htm
12. These final rules are available on the SEC's website at URL: http://www.sec.gov/rules/final/33-8124.htm
13. 'Disclosure controls and procedures' is a newly defined term in the SEC's rules, meaning the controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarised and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in its Exchange Act reports is accumulated and communicated to the issuer's management, including its principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.
14. These final rules are available on the SEC's website at URL: http://www.sec.gov/rules/final/33-8177.htm
15. These final rules are available on the SEC's website at URL: http://www.sec.gov/rules/final/33-8220.htm
16. For a further discussion of the audit committee requirements pursuant to Section 301 of the Act, please see the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, 29th July, 2002, Advisory, entitled 'Congress Approves Major Corporate Governance and Accounting Reform Legislation,' which is available on the website at URL: http://www.mintz.com/images/dyn/publications/ SecAdvisory072902.pdf
17. For a further discussion of the Public Company Accounting Oversight Board, please see the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, 29th July 29, 2002, Advisory, entitled 'Congress Approves Major Corporate Governance and Accounting Reform Legislation,' which is available on the website at URL: http://www.mintz.com/images/dyn/publications/SecAdvisory072902.pdf
18. For further information on the Nasdaq rule proposals, please see Nasdaq's public relations website at URL: http://www.nasdaqnews.com. For further information on the NYSE rule proposals, please see the NYSE's website at URL: http://www.nyse.com