Violation of audit committee rules will result in delisting in USA

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02 Apr 2003

The US Securities and Exchange Commission has Adopted Rules directing the US securities exchanges and markets to prohibit the listing of any security of an issuer (domestic or foreign) that is not in compliance with the audit committee requirements established by the Sarbanes-Oxley Act of 2002. Those requirements provide, among other things, that each member of the issuer's audit committee must be independent.

Also, the audit committee must be directly responsible for appointing, compensating, retaining, and overseeing the auditors; must establish procedures for handling complaints about accounting and auditing matters; must have the authority to engage independent counsel and other advisors it deems necessary; and must be appropriately funded. The rules include several provisions, applicable only to foreign private issuers, that seek to address the special circumstances of particular foreign jurisdictions. Also, foreign private issuers will have a later compliance date (by 31 July 2005) than other issuers (first annual shareholders meetings after 15 January 2004 but not later than 31 October 2004).

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