SEC Adopts Rules Under the Sarbanes-Oxley Act of 2002 on Codes of Ethics and Audit Committee Financial Experts

Overview: The U.S. Securities and Exchange Commission recently adopted final rules that were mandated by Sections 406 and 407 of the Sarbanes-Oxley Act, and set out new requirements with respect to: codes of ethics; and financial experts on an issuer’s audit committee. The final rules implementing Section 406 of the Sarbanes-Oxley Act require reporting issuers, including foreign private issuers, to disclose in their annual report (on Form 10-K, 20-F or 40-F) whether they have adopted a written code of ethics that applies to the issuer’s principal executive officer, principal financial officer, principal accounting officer or controller, or people performing similar functions. These rules provide a safe harbor under which an audit committee financial expert will not be deemed an "expert" for any purpose, including for purposes of Section 11 of the Securities Act of 1933, and that the designation of a person as an audit committee financial expert does not impose any duties, obligations or liability on the person that are greater than those imposed on such a person as a member of the audit committee in the absence of such designation, nor does it affect the duties, obligations or liability of any other member of the audit committee or board of directors.

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Format: HTML | Date: Jan 2003 | Pages: 1