News focus: Non-US corporations take buyback action over Sarbanes-Oxley

Author: | Published: 1 Feb 2005

Foreign companies are taking action over a requirement to register with the SEC if they have more than 300 individual US resident shareholders.

This rule has prompted much concern among non-US listed companies about compliance costs and has resulted in them checking share registers to quantify numbers of US investors. Companies are now taking action to keep below the 300 threshold. The preferred strategy is a share buyback from US investors.

UK broadcaster ITV has led the way. The company, which was advised by international law firm Freshfields, estimates compliance cost savings of £4 million ($7.48 million) in the first year and £3 million a year from 2006 onwards as a result of its December buyback. A spokesman for the company said the move does not represent a withdrawal from the US. In fact, 20%, or 750 million, of the company's shares remain in the hands of US institutions following the buyback, illustrating that Sarbanes-Oxley obligations are triggered...