A US congressman has voiced concerns over the effect Sarbanes-Oxley legislation is having on the country's economy.
Tom Feeney, a Republican, was reported as saying that the accountancy compliance law had led to an "outsourcing of America's 100-year lead in capital formation", in the Financial Times.
Purchasing software can help facilitate compliance to accounting regulations. When using traditional methods however, Sarbanes-Oxley laws are time-consuming and increase accountancy expenses, according to Mr Feeney.
The regulations were implemented in reaction to the WorldCom and Enron scandals to ensure greater transparency in accounting and stock market practices.
Mr Feeney reports that companies are choosing to list on the London and Hong-Kong stock exchanges, rather than on the US exchange as they might previously have done.
"The British are coming and by the way, so is Luxembourg coming and Hong Kong, Shanghai and a dozen other markets. I think it has already started being bad for America," the London-based financial journal quoted him as saying.
The congressman also cited Sarbanes-Oxley as a hindrance on Nasdaq's attempts to increase their ownership of the London stock exchange and on the New York stock exchange's attempts to buy the Euronext Bourse in Paris.
"Now there's a sort of fire hydrant of evidence that we have a huge leak in our capital markets," he told the FT.
|