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Norms relaxed for listing non-US cos in Nasdaq
By siliconindia
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Thursday, 15 May 2003, 19:30 IST
BANGALORE: Nasdaq had recently written to CEOs of India Inc that the Securities Exchange Commission (SEC), the US market regulator, has relaxed some of the rules that were a deterrent for foreign companies to get listed on the US exchange.
According to an Indian business daily, the SEC order dated April 24 follows concerns raised by "companies, lawyers, market participants" pointing to conflict between legislation in their home countries and the new requirements of the American law (Sarbannes Oxley Act) enacted last year. Sarbannes Oxley Act or Sox, as it is popularly known, enforces stringent disclosure norms and penalties in the event of violations. It seeks to strengthen investor confidence in companies listed on the American bourses.
SEC has now extended the deadline for non-US companies to comply with the Act by a year, to July 2005. Further, several relaxations have been made in regard to audit-related measures undertaken by the ADR issuers.
The daily said that Bharat Petroleum Corporation Ltd (BPCL) had early last month informed the Government that it was not willing to go through with the ADR issue unless the latter indemnified the board directors against any liabilities. A fall-out of this Act is that directors of companies listed on the American bourses could be sued and tried under American law for poor governance, even if they were of foreign origin.