On November 15, 2007 in an open meeting the SEC adopted a series of new rules aimed at facilitating access to US capital markets for small issuers and international companies. These include two changes which are very relevant to London capital markets, the adoption of revisions to Rules 144 and 145 under the Securities Act of 1933, as amended (the “Securities Act”) and the elimination of reconciliation requirements to U.S. GAAP for foreign private issuers who report in International Financial Reporting Standards (“IFRS”).

Revisions to Securities Act Rules 144 and 145

The amendments to Rule 144:

· shorten the holding period for restricted securities of reporting companies to six months;

· substantially simplify Rule 144 compliance for non-affiliates by allowing non-affiliates of reporting companies to freely resell restricted securities after satisfying a six-month holding period (subject only to the Rule 144(c) public information requirement until the securities have been held for one year) and by allowing non-affiliates of non-reporting companies to freely resell restricted securities after satisfying a 12-month holding period;

· for affiliates’ sales, revise the manner of sale requirements for equity securities and eliminate them for debt securities and relax the volume limitations for debt securities;

· for affiliates’ sales, raise the thresholds that trigger Form 144 filing requirements from 500 shares or $10,000 to 5,000 shares or $50,000;

· simplify and streamline the Preliminary Note to and other parts of Rule 144; and

· codify certain staff interpretations relating to Rule 144.

The amendments to Rule 145:

· eliminate the presumptive underwriter provision except with respect to transactions involving blank check or shell companies; and

· revise the resale provisions of Rule 145(d).

These amendments will be effective 60 days after their publication in the Federal Register.

The final amendments do not toll the Rule 144 holding period while the security holder has entered into hedging transactions which had previously been included in the rule proposals.

The full text of the detailed releases concerning these items will be posted to the SEC Web site as soon as possible.

For the full press release please visit: http://www.sec.gov/news/press/2007/2007-233.htm

Elimination of Reconciliation Requirement to U.S. GAAP for IFRS-Reporting Foreign Private Issuers

The Commission approved rule amendments under which financial statements from foreign private issuers in the United States will be accepted without reconciliation to U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) only if they are prepared using IFRS as issued by the International Accounting Standards Board (“IASB”). The purpose of the requirement to use the IASB-approved version is to encourage the development of IFRS as a uniform global standard, not a divergent set of standards applied differently in every nation. Consistency of application of IFRS will help U.S. investors who own foreign securities to have better comparability.

Many commentators view this move by the Commission as clearing the way for the London-based IASB accounting standards to be adopted globally and to be recognized as the international accounting standard.

The rule amendments will take effect 60 days after they are published in the Federal Register and apply to financial statements covering years ended after November 15, 2007.

For the full press release please visit: http://www.sec.gov/news/press/2007/2007-235.htm

This update is a summary for general information only. It is not a full analysis of the matters presented and should not be relied upon as legal advice.