Daily Telegraph: NYSE chief stokes fears over reforms

27 April 2006

The US stock markets are losing out on new listings because of burdensome regulation, rising litigiousness and the increased complexity of accounting rules, the chairman of the New York Stock Exchange has warned. Marshall Carter said the rigours of the Sarbanes-Oxley Act was driving firms to seek IPOs on other exchanges.

'Despite a welcome resurgence in global equity financing, the United States is losing the competition for these new listings,' he told the House of Representatives capital markets sub-committee. His comments come amid growing pressure from business to dilute some of the more stringent governance reforms put in place following high profile corporate scandals including the collapse of Enron.

Committee chairman Richard Baker said he shared Mr Marsall's concerns and called for reforms of the Sarbanes-Oxley legislation, especially Section 404, the clause that requires companies to disclose more details about internal financial controls. 'Combined with increasingly efficient and liquid foreign markets [they] pose a significant challenge to the supremacy of US capital markets,' he said. Only one of the 24 largest IPOs last year took place in the US, figures from Ernst & Young show.

The success of overseas markets is given as one of the chief reasons for US exchanges to get involved in the consolidation of the industry.
By David Litterick in New York

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