SarbOx Forcing Capital From NYC To London?
Many publicly traded companies have been complaining about Sarbanes-Oxley since it became law in the U.S. in 2002. But lately SarbOx has been blamed for New York’s slip against London in the competition for global capital. Some key IPOs this year chose to offer stock in London over New York. But then again the $14 billion New York Stock Exchange - Euronext merger was approved today. Maybe New York needs to fight harder for those investor dollars.
Clay Risen – a columnist for The New Republic – says that times have changed – and capital doesn’t have to be in New York anymore to make it. London, Hong Kong and Dubai are all strong and independent financial centers. In the future – he sees each market having a specialization – much in the way London now focuses on small-cap companies.
Risen also says there’s more to New York’s dilemma than the infamous Section 404 of SarbOx. Homeland Security’s strict immigration and visa regulations have put a stop to hiring key foreign talent. So just getting into the country to do business is becoming more and more difficult.
In the end – Risen says – Sarbanes will have less of an impact on U.S. competitiveness than the “globalization of capital” and these exchanges' aggressiveness in going after companies for business.