Swiss firms listed on the New York Stock Exchange will have to obey new corporate governance laws in the same way as their American counterparts.This content was published on August 29, 2002 - 07:50
The US Securities and Exchange commission (SEC) confirmed that the rules applied to all listed firms following a meeting with Congress.
The announcement affects companies such as UBS, Credit Suisse, Novartis, Swisscom and ABB, which are all listed on the New York Stock Exchange.
Swiss firms had thought they would be largely unaffected by the new legislation, which President George W Bush signed into law in early August in the wake of accounting scandals at Enron and Worldcom.
But this week's announcement cleared up any confusion - now all of the 1,300 foreign firms listed on the NYSE will have to follow the same rules as American companies.
The German justice minister, Herta Däubler-Gmelin, was quick to condemn the move saying that domestic laws should not be allowed to apply to other countries.
She said the US should respect the fact that European countries have their own corporate governance laws, which have the same aim as the new US law.
She called on the EU to "have a friendly chat" with US authorities about the issue.
Before the SEC announcement the Swiss pharmaceutical giant, Novartis, told swissinfo that their accounting procedures already largely fulfilled the requirements of US law.
Novartis posts its results using the America's Generally Accepted Accounting Principles (GAAP), while another NYSE listed firm, Swisscom, uses a special 20F accounting form, which complies with US standards.
These practices will now need to be reviewed.
Where the buck stops
Under the new US legislation company bosses face prison terms of up to 20 years if they are found guilty of knowingly publishing false information. Both CEOs and CFOs are required to personally sign off their company's financial results, which means they can be held liable if irregularities are later discovered.
swissinfo with agencies
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