Rules governing procurement and supply chain management in the UK are unlikely to become stricter, even if the London Stock Exchange (LSE) is taken over, it has been claimed.
The Financial Services Authority (FSA) has claimed that, even if US-based Nasdaq does buy the LSE it, it does not mean that America's tougher Sarbanes Oxley (SOX) regulations will automatically becoming governing business law in Britain.
However, it admitted that in the long-term if a foreign firm chose to buy the LSE then it could fall into the jurisdiction of a different regulator should the purchaser so wish.
FSA chairman Callum McCarthy explained: "Neither the FSA nor the Securities and Exchange Commission consider that US ownership of the LSE, in and of itself, would result in US regulations, including Sarbanes-Oxley, applying to companies listed or quoted on its markets or member firms of the LSE."
He admitted, however: "Theoretically, in the longer term, a new entity might seek to achieve further benefits from rationalisation of its regulatory structure. This could at the extreme involve the LSE no longer being subject to UK regulation."
SOX was implemented in the US back in 2002 after a series of major financial scandals, seeking to reinstall public confidence in big business and the way it executes accounting and reporting practices.
The legislation requires all financial reports to be certified by chief executive and financial officers and for stricter and more independent auditing, as well as more openness from businesses in general.
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