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SEC Approves Code Rules For Foreign Cos. On Nasdaq

Compliance Week | October 26, 2004

Last week, the SEC approved Nasdaq amendments that describe the speed with which foreign companies must disclose waivers to their codes of business conduct.

The order relates to NASD Rule 4350(n), which requires listed companies maintain a code of conduct that complies with Section 406 of Sarbanes-Oxley. The code is applicable to all directors, officers and employees.

According to the NASD rules, only boards can waive ethics codes for executives or directors, and the waiver must be disclosed promptly to shareholders, along with the reasons. U.S. companies have five business days to disclose those waivers on Form 8-K.

The latest rule change specifies that all issuers, including foreign public companies, would have to comply with that same five business day requirement.

The rule would not, however, apply to foreign private issuers, who must...

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