SOX Expands to China

The Sarbanes-Oxley Act affects public companies in the United States. Now similar legislation is affecting listed companies in China.

On June 28, 2008, the Chinese Ministry of Finance, the China Securities Regulatory Commission, the National Audit Office, the China Banking Regulatory Commission, and the China Insurance Regulatory Commission jointly announced the Basic Standard for Enterprise Internal Control. This requires listed Chinese companies to comply from July 1, 2009 onward. Also described as "C-SOX," the Basic Standard will require listed companies to make substantial changes to the way they control electronic information. It will drive demand for email archiving the same way SOX has in the United States.

India is also beginning to pay attention to email. In this recent article, it is reported that the Indian government is developing new legislation to manage email content for legal discovery.

Email archiving is getting to be more and more important in non-U.S. jurisdictions.

... Bob Spurzem

One Comment

  1. Posted May 19, 2009 at 7:07 AM | Permalink

    Bob,

    We have been tracking the development of China’s “C-SOX” for a while now. The implementation guidelines are not yet finalized, but the foundational elements are in place.

    C-SOX requires companies listed in China to conduct self-evaluations of their internal controls, publish an evaluation report on an annual basis and hire qualified agencies to audit the effectiveness of their internal controls. The Basic Standard will apply to over 900 companies listed on the Shanghai Stock Exchange and about 800 companies listed on the Shenzhen Stock Exchange, as well as other state-controlled entities.

    While the government initially announced a start date of July 1, 2009, it now looks like the implementation deadline will be pushed back until January 2010 (at least that’s what we are hearing here in Beijing.

    Readers can learn more on our blog: http://c-sox.blogspot.com

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