If the words "Sarbanes-Oxley Act" make your eyes glaze over, or if you think that this is a subject that only accountants need to concern themselves with, it may be time to "wake up and smell the coffee".

When Senator Paul Sarbanes and representative Michael Oxley wove their merry web of reforms aimed at tightening up regulation of SEC registered companies, the net they created was cast far and wide and many Bermuda-based companies were caught.

One of the key aims of the proposed rules is to ensure independence of auditors and to make sure that they can carry out investigation of a company's books without interference from management.

One high profile regulation requires the chief executive officer and chief financial officer to sign off on any financial statements or filings. The proposed rules also include a whistle blowing provision which requires an attorney to report any misdeeds to the SEC.

Until last week, it was not clear whether local Bermuda law firms would be covered by the new attorney conduct regulations, including the whistle blowing provision.

However the SEC has now finalised some of the regulations and the good news for Bermuda lawyers is that the rule does not apply to a foreign attorney who is:

1. admitted to practice in a jurisdiction outside the US;

2. does not hold themselves out as practising or giving legal advice regarding US law; and

3. is involved in a filing only incidentally or in consultation with US legal counsel.

This indicates that most local lawyers in private practice would not be covered. However, there remains a degree of uncertainty about in-house lawyers working at SEC registered Bermuda-based companies.

The Bank of Bermuda's legal counsel, Lori Monk, said that the bank would be reviewing which of its in-house lawyers are covered under the rules and would introduce appropriate guidelines. Ms Monk recently gave a lecture to local law firm Conyers Dill & Pearman about the broader implications of the Act.

Since the proposed rules were announced last summer, there have been several presentations on the subject within the business community.

KPMG `s Alan Goldstein and Richard Lightowler gave a presentation to their clients in October, Alan Thompson, chief executive officer at the Bank of Butterfield, recently talked to the Bermuda Society of Internal Auditors about Sarbanes-Oxley as the "challenge of the moment"; and Christine Patton, general counsel at PartnerRe gave a presentation last year to the local Bar Association. Most of the financial services companies and US listed companies based in Bermuda have recognised the requirements and are assessing the implications.

The president of The Institute of Chartered Accountants of Bermuda, (ICAB), Andrew Parsons, said that on the whole, Bermuda-based US listed companies would be covered by Sarbanes-Oxley regulations. "It will mean a greater duty of care for boards of directors, management and auditors," he said.

Last April the ICAB formed a special task force to review the new SEC requirements as well as the requirements of the new Canadian Public Accountability Board.

The task force has not yet completed its report and although they have formulated certain recommendations, these have yet to be made public.