Companies listed in Europe would remain subject to European regulations in the event of a trans-Atlantic stock exchange merger, EU Internal Market Commissioner Charlie McCreevy said on July 5.
Some European investors are concerned that a proposed merger between Euronext and the New York Stock Exchange (NYSE) could oblige European groups to comply with the Sarbanes-Oxley corporate governance rules in force in the U.S.
McCreevy said that shareholders should decide whether Euronext, which operates stock exchanges in Amsterdam, Brussels, Paris and Lisbon, should merge with the NYSE or with the Frankfurt market operator Deutsche Boerse. The markets should then determine the structure of a merged entity to avoid any influence by the Sarbanes-Oxley legislation in Europe, he said.
Foreign companies listed on U.S. financial markets have until the end of this year to comply with SOX legislation.
Euronext has insisted that it would continue to operate a federal system under which its stock markets were regulated by the authorities in their respective countries.
The U.S. Securities and Exchange Commission has already said that a merger of the NYSE with Euronext would not mean an extension of U.S. regulations to Europe, while the head of the NYSE has said that a deal would not force European firms to adopt U.S. reporting rules.
Deutsche Boerse has repeatedly approached Euronext with merger proposals, but Euronext management favors a merger with the NYSE and has even signed a preliminary deal to that end worth $10 billion (7.8 billion euros).
Copyright Agence France-Presse, 2006