In December 2005, the Securities and Exchange Commission (SEC) proposed rule amendments that would enhance the ability of non-US companies to terminate the registration of their securities under the US Securities Exchange Act, cease providing annual and other reports to the SEC and discontinue their compliance with certain provisions of the US Sarbanes-Oxley Act. By easing requirements for non-US companies wishing to exit the Exchange Act registration and reporting system, the proposed rules would address aspects of SEC regulation that have made it difficult for companies subject to Exchange Act reporting obligations to terminate such obligations and have consequently discouraged foreign companies from accessing US public capital markets. The proposed rules follow significant lobbying efforts by European trade groups, including the Confederation of British Industry, and are currently open for public comment.
Under current SEC rules, a non-US company will incur an obligation to provide reports to the SEC and become subject to certain provisions of the Sarbanes-Oxley Act if:
