ISDA®
INTERNATIONAL
SWAPS AND DERIVATIVES ASSOCIATION, INC
NEWS RELEASE
For Immediate Release Friday, November 16, 2007
For More Information, Please Contact:
Louise Marshall, ISDA New York,
212-901-6014, lmarshall@isda.org
ISDA Welcomes SEC’s Decisions on Financial Statement Reconciliation and
Non-Public Securities Offerings
NEW
YORK, Friday, November 16, 2007– The International Swaps and Derivatives Association
(ISDA) said today that it welcomed two new SEC rulings on financial statement reconciliation
requirements by foreign issuers and on non-public offerings of securities.
On
November 15, the U.S. Securities and Exchange Commission (SEC) unanimously
approved amendments to it rules allowing a foreign private issuer to file
financial statements prepared in accordance with the International Financial
Reporting Standards (IFRS) as published by the International Accounting Standards
Board (IASB) without reconciliation to U.S. GAAP. When effective, this ruling
will apply for fiscal years ending after November 15, 2007.
The
ruling followed the SEC’s proposal, which was issued in July. Publishing two
sets of financial statements results in a significant burden for ISDA members
who are foreign private issuers and can create uncertainty among investors
with regard to which financial information to use to assess an issuer’s operating
results.
In
September, ISDA wrote to the SEC supporting the proposals, agreeing that the
burden of meeting the additional disclosure requirements can act as a deterrent
to listing in the U.S. ISDA supported the SEC in recognising that the financial
information provided by IFRS is adequate for investors even if it is not always
the same as the information provided under U.S. GAAP.
In a separate rulemaking, the SEC voted to adopt changes to Rules 144 and 145 of the Securities Act of 1933. These provisions address the non-public offering of securities, and provide exemptions from most of the registration and reporting requirements of the securities laws. ISDA and other trade associations supported the SEC’s original proposal, but strongly cautioned the Commission against requiring tolling of the holding period for restricted securities during those times in which the security owner had a hedged position, such as via an equity swap. The SEC agreed that tolling would be complicated and costly, without any clear evidence that hedging posed potential for abuse. The SEC’s final rule shortens the holding period for restricted securities of public issuers to six months.
About ISDA
ISDA,
which represents participants in the privately negotiated derivatives industry,
is among the world’s largest global financial trade associations as measured
by number of member firms. ISDA was chartered in 1985, and today has approximately
820 member institutions from 56 countries on six continents. These members
include most of the world’s major institutions that deal in privately negotiated
derivatives, as well as many of the businesses, governmental entities and
other end users that rely on over-the-counter derivatives to manage efficiently
the financial market risks inherent in their core economic activities.
Information about ISDA and its activities is available on the Association's
web site: www.isda.org.
®ISDA is a registered trademark of the International Swaps & Derivatives Association, Inc.