Sox compliance and cases

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2014 Hi, Plz help me out...

1) Whether SOX compliance is applicable only to the companies which are listed in US stock market ?

2) Whether a US based IT company (which is listed in US Stock market)have to follow SEBI guidelines ? Is it must ? or Is it enough if they comply only with SOX ?

Querist : Anonymous

Querist : Anonymous (Querist)

15 April 2014 can anyone plz reply....

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Here’s a clear breakdown on your SOX compliance questions:

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### 1) Is SOX compliance applicable only to companies listed on US stock markets?

* **Yes**, the Sarbanes-Oxley Act (SOX) primarily applies to **companies listed on US stock exchanges** (like NYSE, NASDAQ).
* This includes both **US companies and foreign companies** that are listed in the US.
* SOX aims to improve corporate governance, financial disclosures, and prevent fraud for publicly traded companies in the US.

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### 2) Does a US-based IT company listed in the US have to follow SEBI guidelines? Is SOX compliance alone enough?

* If the company is **only listed in the US**, then it **must comply with SOX**.
* However, **if the company is also listed in India (on BSE/NSE)** or is a significant Indian entity, then it must comply with **SEBI regulations** as well.
* **SEBI (Securities and Exchange Board of India)** guidelines apply to companies listed on Indian stock exchanges and Indian entities raising capital in India.
* So:

* **US-listed only** → SOX compliance is mandatory.
* **Dual-listed (US + India)** → Must comply with **both SOX and SEBI**.
* **Indian entity without US listing** → SEBI rules apply, not SOX.

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**Summary:**

| Situation | SOX Compliance | SEBI Compliance |
| ------------------------------- | -------------- | --------------- |
| Listed only on US exchanges | Mandatory | Not mandatory |
| Listed on US & Indian exchanges | Mandatory | Mandatory |
| Indian entity only | Not applicable | Mandatory |

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If you want, I can also share some notable **SOX violation cases** and their lessons! Would you like that?

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