November 30, 2006
SEC Commissioner Campos Fights Back on "SOX Attacks"
In this blog we have repeatedly fought back against those who oppose SOX just because they think it is costing them money. The "facts" they cite are usually self serving and just plain wrong.
As Commissioner Campos correctly states: The rest of the world is more competitive.
In US markets, you can raise more money in many cases. The value of your share price is likely to trade at a premium but it is more expensive to raise money on US markets.
Wall Street needs to look at fees and practices to see where the erosion of US competiveness began. This trend began long before SOX.
Let's face facts: When you charge high prices for your products or services, you leave the other guy lots of room to compete. Wall Street's fees and practices have left a lot of room for other markets to compete and make money.
Here is a an excerpt from an article from Investment News on the details of some facts to consider from SEC Commissioner Campos setting the record straight.
"Campos: Don't blame SOX for IPO woes
By Sara Hansard
December 1, 2006
Securities and Exchange Commission member Roel Campos today defended the extensive accounting regulations of the Sarbanes-Oxley Act of 2002 against criticism that they are harming U.S. competitiveness.Disputing the findings of a report to the White House released yesterday (InvestmentNews, Nov. 30) , Mr. Campos told the Consumer Federation of American annual financial services conference in Washington that the U.S. is losing business such as initial public offerings to foreign markets primarily because of increased competitiveness of foreign markets.
He said the U.S. began losing IPO business to foreign markets, such as the London Stock Exchange, as long ago as 1996, six years before Sarbanes-Oxley was enacted in response to U.S. corporate scandals. "You can't blame Sarbanes-Oxley for that," Mr. Campos said. "It's a trend, a world trend."
Further, he said that, in absolute dollar terms, the money raised by IPOs in the U.S. and elsewhere has been on the rise since 2004.Mr. Campos also said there are problems with lighter regulation in foreign markets that the U.S. would not want.
He cited several examples of Russian companies offered on the London Stock Exchange that offered few investor protections for minority shareholders...
He acknowledged that litigation is a problem in the U.S., suggesting the litigation reform be tied to expanding shareholder rights.Shareholder rights need to be enhanced if shareholders are given less ability to take companies to court for securities law matters, Mr. Campos suggested.
The SEC is in the process of discussing what to do about shareholder access to company proxy ballots for director votes. Without expanded shareholder rights "there is only room for litigation," he said.Mr. Campos suggested a system under which shareholders holding at least 5% of a company's shares would have the right to include their own director nominations on company ballots."
If your company is listed on US or Canadian exchanges and needs to comply with the requirements of Sarbanes-Oxley Section 404 and/or MI 52-109 cost effectively, see http://www.issuescentral.com/ to learn more about Compliance Playbook®. For companies headquartered in Canada and listed on Canadian or US exchanges, go the website of our exclusive Canadian distributor, Thomson Carswell, http://www.compliancepartner.ca/ to learn more about Compliance Partner(tm).
As Commissioner Campos correctly states: The rest of the world is more competitive.
In US markets, you can raise more money in many cases. The value of your share price is likely to trade at a premium but it is more expensive to raise money on US markets.
Wall Street needs to look at fees and practices to see where the erosion of US competiveness began. This trend began long before SOX.
Let's face facts: When you charge high prices for your products or services, you leave the other guy lots of room to compete. Wall Street's fees and practices have left a lot of room for other markets to compete and make money.
Here is a an excerpt from an article from Investment News on the details of some facts to consider from SEC Commissioner Campos setting the record straight.
"Campos: Don't blame SOX for IPO woes
By Sara Hansard
December 1, 2006
Securities and Exchange Commission member Roel Campos today defended the extensive accounting regulations of the Sarbanes-Oxley Act of 2002 against criticism that they are harming U.S. competitiveness.Disputing the findings of a report to the White House released yesterday (InvestmentNews, Nov. 30) , Mr. Campos told the Consumer Federation of American annual financial services conference in Washington that the U.S. is losing business such as initial public offerings to foreign markets primarily because of increased competitiveness of foreign markets.
He said the U.S. began losing IPO business to foreign markets, such as the London Stock Exchange, as long ago as 1996, six years before Sarbanes-Oxley was enacted in response to U.S. corporate scandals. "You can't blame Sarbanes-Oxley for that," Mr. Campos said. "It's a trend, a world trend."
Further, he said that, in absolute dollar terms, the money raised by IPOs in the U.S. and elsewhere has been on the rise since 2004.Mr. Campos also said there are problems with lighter regulation in foreign markets that the U.S. would not want.
He cited several examples of Russian companies offered on the London Stock Exchange that offered few investor protections for minority shareholders...
He acknowledged that litigation is a problem in the U.S., suggesting the litigation reform be tied to expanding shareholder rights.Shareholder rights need to be enhanced if shareholders are given less ability to take companies to court for securities law matters, Mr. Campos suggested.
The SEC is in the process of discussing what to do about shareholder access to company proxy ballots for director votes. Without expanded shareholder rights "there is only room for litigation," he said.Mr. Campos suggested a system under which shareholders holding at least 5% of a company's shares would have the right to include their own director nominations on company ballots."
If your company is listed on US or Canadian exchanges and needs to comply with the requirements of Sarbanes-Oxley Section 404 and/or MI 52-109 cost effectively, see http://www.issuescentral.com/ to learn more about Compliance Playbook®. For companies headquartered in Canada and listed on Canadian or US exchanges, go the website of our exclusive Canadian distributor, Thomson Carswell, http://www.compliancepartner.ca/ to learn more about Compliance Partner(tm).
