SEC Adopts Foreign Issuer Reporting Enhancements
 
September 8, 2008
 

On August 27, 2008, the SEC adopted three sets of rule amendments relating to foreign private issuers (FPIs), including one set of amendments which it referred to as Foreign Issuer Reporting Enhancements. The purpose of the Reporting Enhancements is to make it easier for U.S. investors to obtain timely financial information with respect to FPIs.

Highlights of the Reporting Enhancements include:

• FPIs will be required to file their annual reports on Form 20-F within four months after the end of their fiscal year end as compared to the existing six-month deadline. The change will take effect for fiscal years ending on or after December 15, 2011 – so for a calendar-year issuer, it will take effect for the 2011 annual report filed in 2012.
• Foreign issuers will need to determine once each year on the last day of its second fiscal quarter whether they satisfy the SEC’s definition of FPI and the amendments will provide a transition period for a company that loses FPI status. Under current rules, a foreign issuer must test its status continually and start reporting as a U.S. company immediately upon the loss of FPI status.
• FPIs will now be required to report on Form 20-F (i) changes in, and disagreements with, their auditors, (ii) payments and other charges relating to ADRs, and (iii) disclosures about significant differences in corporate governance practices in their home countries as compared to the U.S.
• Certain revisions to the financial reporting requirements of FPIs, specifically (i) the elimination in most circumstances of the limited U.S. GAAP reconciliation option set forth in Item 17 of Form 20-F, and (ii) the modification of Item 17 of Form 20-F to eliminate the instruction allowing FPIs to omit segment data from their U.S. GAAP financial statements and to have a qualified U.S. GAAP audit report.

The full text of the adopting release is expected to be available on the SEC’s Web site shortly.

http://www.sec.gov/news/press/2008/2008-183.htm

For more information, contact:

Kara L. MacCullough
305.789.7548
kara.maccullough@hklaw.com

Esther L. Moreno
305.789.7442
esther.moreno@hklaw.com

toll free: 1.888.688.8500

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