(The news featured below is a selection from the news covered in the Federal Securities Law Reporter, which is distributed to subscribers of SEC Today.)

Atkins Discusses Foreign Issuers' Concerns in Paris Speech

During a recent speech in Paris, SEC Commissioner Paul Atkins expressed concerns that some of the SEC's regulations may be discouraging foreign investment. In an ideal world, he said that neither the Sarbanes-Oxley Act nor the implementing rules should dissuade a foreign company from considering a U.S. listing. However, Atkins acknowledged that the decisions of foreign issuers are being influenced by the real and the perceived costs of Sarbanes-Oxley compliance.

Atkins also discussed foreign issuers' concerns about deregistering from the U.S. markets because of the costs and uncertainties surrounding the process. The SEC proposed rules to make the termination of a foreign private issuer's reporting requirements less difficult. Atkins believes the SEC should allow for as much flexibility as possible. The deregistration proposal has triggered a debate over the number of foreign issuers that would be eligible to rely on the new rules, if adopted. While the numbers have ranged from 5% to 26% of issuers that may be eligible, Atkins reminded the audience that the underlying premise of the rule is to relieve companies of their registration obligations where there is relatively little interest by U.S. investors in the domestic market.

Atkins spoke about the efforts underway to achieve convergence between U.S. GAAP and international financial reporting standards. He is optimistic about the progress to date, but added that achieving evenness in the application of new standards may be just as important as narrowing the differences between accounting systems. The U.S. is watching the transition to IFRS with great interest, according to Atkins, and recognizes the difficulty of the process.

Atkins raised concerns about suggestions by some that U.S. companies should be required to reconcile their U.S. GAAP financial statements to IFRS. Atkins said that approach would undermine efforts toward mutual recognition. Some see it as a useful bargaining chip, but Atkins said it would be counterproductive. The collective efforts of parties on both sides of the Atlantic should focus on ensuring the success of IFRS, in his view.