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Global Updates in a Nutshell

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March 08, 2012 | Jennifer Namazi

Global Updates in a Nutshell

One of the aspects of stock plan management that I've always found particularly challenging is keeping on top of "global" developments. We keep ourselves plenty busy trying to stay abreast of U.S. requirements for administering our stock plans, and when you layer in a foreign jurisdiction, or two, or a dozen, or more, now you've got a handful. The work has multiplied.

This week brought a few changes or updates on the global horizon, and in today's blog I'll summarize them in case you're interested.

A SAFE Update in China

For Companies offering equity compensation to employees who are PRC nationals in China (and I know that there are many of you that do), approval from the State Administration of Foreign Exchange ("SAFE") has been required since 2007 (via Circular 78). The process for obtaining SAFE approval has been long and cumbersome for many companies. For those companies who have, are contemplating, or are in process of seeking to gain such approval, some good news has emerged: in February, Circular 78 was replaced with a new Circular 7, effective immediately. Circular 7 seems to simplify the process of obtaining SAFE approval for equity compensation plans, including provisions that reduce the documentation required, expand the entities and people covered in the application, and cover more award types. There are some great alerts with more details on this topic in our Global Stock Plans portal. Be sure to check them out - included is information on action items that may be necessary even if you already have previously obtained SAFE approval in China.

Expanded Reporting in France for Qualified Plans

For those of you with French-qualified stock plans, new reporting requirements went into effect on January 31, 2012. Included is expanded reporting for stock option exercises. The bottom line: for stock options exercised on or after January 31, 2012, the new requirements apply. For details, visit our Global Stock Plans portal.

Adoption of IFRS: Urban Legend?

The talk about the possibility of the U.S. adopting IFRS as its accounting standard has started to sound like an urban legend in my book. Okay, well not really, but it was fun to describe it that way. It does seem like there is a lot of talk about "when" the SEC may have a timeline or more guidance on if and when IFRS will be implemented (and usually it remains just "talk", since no SEC decision on the matter has been made). According to the Journal of Accountancy, the SEC's Chief Accountant, James Kroeker, indicated at a conference in February that the SEC is on track to issue a decision in the next few months. A precise deadline has not been publicized and it seems that won't happen until the SEC gets much closer to completing their report on the issue. This is something to keep an eye on over the next 6 months or so. Stay tuned.

Those are the highlights on the global front this week. As I mentioned above, there are resources in our Global Stock Plans portal that go further into these updates - well worth a few minutes of time.

- Jennifer

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