BRUSSELS, Oct 10: The head of the US Securities and Exchange Commission (SEC) sought on Thursday to calm European Union (EU) concerns about a new US corporate law which also applies to foreign companies listed in the United States.

Harvey Pitt, speaking after talks in Brussels, offered to seek “intelligent and creative” accommodations over the European concerns about the law, passed in July after a series of US corporate scandals.

Under the Sarbanes-Oxley Act, chief executives and chief financial officers of US and foreign companies with US listings must provide sworn statements verifying the accuracy of financial statements and annual reports to the SEC.

The move has drawn criticism in Europe, where some business leaders have warned that it could make companies “think twice” about listing in the United States.

“Various jurisdictions, including the EU, have expressed concerns about the extra territorial effects of the act. These concerns deserve, and will receive, our careful consideration,” Pitt said in a speech.

Speaking to reporters afterwards, he confirmed he had discussed the EU concerns with Internal Market Commissioner Frits Bolkestein in talks on Wednesday.

“It’s my hope that any major difficulties can be handled in an intelligent and creative fashion,” he said.

“We are prepared to consider how we can fulfil the mandate of the act through our rule-making and interpretive authority in ways that accommodate the home country requirements,” he added.

Scandals like Enron and WorldCom hit investor confidence in the United States but also further afield at a time when the global economy was still struggling to emerge from a slowdown.

At the end of September EU foreign ministers agreed to rapidly tighten up accounting guidelines to avoid the kind of scandals that have shaken corporate America.

The ministers specifically agreed to develop an “action plan on company law including corporate governance” for the 15-member bloc, notably singling out the role of corporate bosses.

Pitt stressed that strengthening corporate regulations was not just a US problem. The Sarbanes-Oxley Act “was prompted by problems encountered in the US, but these problems are global in dimension,” he said.

He welcomed the fact that many EU countries and the European Commission are re-examining their existing oversight and governance systems, calling it “an effort we commend and support.”

“We seek to usher in a new regulatory regime in concert with you, not impose our solutions on you,” he added.

“We will be receptive and creative in finding a way to implement both the intent of Sarbanes-Oxley and the intent and letter of any local jurisdiction,” he said.—AFP