BIO urges relaxing of SEC Sarbanes-Oxley regulatory burden

The US Biotechnology Industry Organization is calling for the Securities and Exchange Commission to reform the Section 404 of the Sarbanes-Oxley Act, citing the disproportionate burdens that the legislation imposes.

The 2002 Act was introduced in response to the Enron scandal, in which the firm was found to have used unethical and illegal accountability methods to manipulate its share price. However, the cost and complexity of the new regulations have persuaded some USA-based firms to remove their share listings on US stock exchanges. The UK drugmaker Acambis cited the Sarbanes regulatory burden as the reason for withdrawing its listing from the Nasdaq.

BIO president Jim Greenwood said: "four years after enactment of the Sarbanes-Oxley Act, it is necessary to correct sections that are creating unforseen, detrimental effects on smaller public companies. We support reforms that enable emerging companies to remain competitive and do not force companies to divert valuable research and development dollars to administrative tasks."