If the London Stock Exchange comes under U.S. ownership, companies registered on the LSE will not be subject to Sarbanes-Oxley. However, in the longer term such a takeover could “theoretically” make it possible, the head of the FSA said. According to the experts at InfoWatch, the British Combined Code is not so different from SOX, suggesting the U.S. law would quickly take root across the Atlantic.
The head of the British Financial Services Authority (FSA) stated that if the London Stock Exchange (LSE) comes under American ownership, it does not mean that Sarbanes-Oxley (SOX) or other U.S. regulatory laws will apply to companies listed on the LSE. This view is shared by the FSA and the U.S. Securities and Exchange Commission, said FSA chairman Sir Callum McCarthy. However, Sir Callum did say that “theoretically” any such takeover in the longer term could lead to the LSE being subject to overseas regulations if the market had a foreign operator. Therefore, companies represented on the LSE could find themselves subject to SOX in the not too distant future.
“For companies represented on the LSE today there is the Combined Code of Corporate Governance. It has a section on internal controls that is every bit as rigorous as section 404 of SOX. So, if SOX compliance becomes a necessity for companies represented on the LSE, then the U.S. law will quickly take root,” believes Denis Zenkin, marketing director at InfoWatch.
Source: Telegraph
