In a press statement released today, Callum McCarthy, Chairman of the Financial Services Authority (FSA), commented on the potential longer term implications of any change of ownership of the London Stock Exchange (LSE). He observed that the situation could occur where LSE member firms and issuers could become subject to the US's Securities and Exchange Commission. One of the SEC’s requirements is compliance with SOX, the Sarbanes-Oxley Act, which has been blames for large increases in external audit fees for US and non-US companies listed on US exchanges.
In the short term, McCarthy said "as long as it remains a UK exchange, the FSA will continue to require that it meets its regulatory obligations as set by us under the Financial Services and Markets Act". He went on to say that the Euronext Regulatory College, consisting of the national securities regulators of the UK, Belgium, France, the Netherlands and Portugal, is looking at the issues raised by the proposed merger between Euronext and the New York Stock Exchange, a transaction that impacts the FSA as it is responsible for supervising London’s LIFFE, owned by Euronext.
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