Swiss say no to US corporate governance law
The Swiss authorities have said they do no want companies to submit to a new American corporate governance law.
While the Swiss say they understand the objectives of the law, they are concerned it will cause problems for companies listed on the New York Stock Exchange (NYSE).
The legislation was passed last summer in the wake of accounting scandals at energy trader Enron and telecommunications giant Worldcom.
The US Securities and Exchange Commission (SEC) said all foreign companies listed would have to comply with the new regulations.
This decision caused an uproar in Europe when it was announced. The German justice minister condemned the move, saying that American domestic laws should not be allowed to apply to other countries.
Measured response
The Swiss have so far given a more measured response to the American legislation.
“We share the objectives of the law,” said Hanspeter Tschäni, of the Swiss State Secretariat for Economic Affairs (Seco).
Tschäni, who headed a delegation that discussed the matter with the SEC this week, told swissinfo that recent events in Switzerland have shown that more oversight is needed in the corporate domain.
“It is also our feeling in Switzerland that the state needs to play a role in this sector as well,” he said.
Tschäni said the real problem was the way the United States drafted its law.
“It will create problems for foreign firms,” he told swissinfo. “It will be difficult to comply with US requirements and there will also be conflicts with their domestic legislation.”
According to the new corporate governance law, Swiss auditing firms are supposed to register with an oversight board. These firms are also supposed to submit all kinds of information.
The Swiss particularly object to the inspections to be carried out by this American board. “Allowing such inspections in Switzerland would be a violation of national law,” said Tschäni.
Mutual recognition
The Seco official said the best solution would the mutual recognition of corporate oversight.
“In the European Union and Switzerland, there are moves underway to establish a similar board,” Tschäni told swissinfo. “The most elegant solution would be to recognise that these different boards provide an equivalent level of protection for investors.”
Tschäni added that customer confidentiality would be protected, although Swiss corporate governance laws would have to be modified. “The secrecy relationship between the auditor and the client could be waived under certain circumstances,” he said.
The handful of Swiss companies listed on the NYSE seem less concerned about changes to American legislation. UBS, Credit Suisse, ABB, Novartis and Swisscom have already adapted or are modifying their accounting practices to US laws.
swissinfo, Faryal Mirza and Scott Capper
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