SOX Center

Since the days of America’s first Treasury secretary, Alexander Hamilton, New York’s financial markets have driven and sustained the nation’s economy. And for the last century, companies worldwide that sought to raise capital overwhelmingly came to the United States.

Sadly, and distressingly, that era may be coming to an end, as companies looking for money on the public markets are increasingly going to Europe or Asia. In 2005, initial public offerings of stock in Europe surpassed those in America — in both number and dollar volume. Even as the American IPO market improved in 2006, that trend accelerated: According to PricewaterhouseCoopers, there were 651 IPOs in Europe last year, versus 224 in the U.S., and the European offerings raised almost $40 billion more dollars. China’s markets, with fewer IPOs, raised 30 percent more capital than those in the United States.

WashingtonPost.com: Are U.S. IPOs DOA?

The U.S. Chamber of Commerce had offered up a number of recommendations for changes to the country’s legal and regulatory framework — taking aim at Securities and Exchange Commission and the Sarbanes-Oxley Act in the process.

The chamber, which lobbies for 3 million companies and more than 800 business associations, has been a vocal critic of both the SEC and SOX — going so far as to question the constitutionality of the Public Company Accounting Oversight Board, created as part of the legislation, in a lawsuit.

The chamber’s Commission on the Regulation of U.S. Capital Markets in the 21st Century issued the report Monday, and among its recommendations, says that the SEC should appoint a committee to study ways to reform and modernize the government’s regulatory approach to financial markets and market participants. As part of that reform, the chamber suggests that the SEC should be forced to consider potential costs to companies when writing new rules and that the agency should be given the flexibility to address issues relating to the implementation of SOX by making the legislation part of the Securities Exchange Act of 1934.

WebCPA: Chamber Offers Six Suggestions for U.S. Markets

New York Stock Exchange CEO John Thain said New York would regain its footing against London, Hong Kong and other competitors in financial services once authorities act to scale back some of the more onerous provisions of the Sarbanes-Oxley law.

Speaking at a panel discussion on risks in financial markets Friday at the World Economic Forum, Thain dismissed a story in the Financial Times in which a senior Lehman Brothers official said New York can only hope to staunch the bleeding.

“The United States has a great history of overreacting and then coming back,” Thain said.

U.S. financial executives and politicians have touted this week a report by McKinsey & Co that concluded London, Japan and other parts of Asia as growing in influence and jobs, while New York is on the decline. New York for the first time saw London outpace New York in initial public offerings in 2006, data show, amid a long decline in New York’s share of global IPO revenues.

MarketWatch: NYSE’s Thain: Business will come back

ALL BUSINESS: Rolling Back Sarbanes-Oxley Corporate Reform Law Will Hurt Investors

Critics trying to build support for a rollback of corporate reform laws argue that they’re way too costly and have taken all the fun out of doing business in America. Those are lame excuses.

The latest rant comes from Shutterfly Inc. chairman Jim Clark. He said he is leaving the online photo company because the Sarbanes-Oxley law has taken reform “too far” and was crimping his ability to lead the way he wanted.

Next time he reads about another company swept up in the stock-options backdating scandal or hears of increased fraud in foreign financial markets, then maybe he’ll wake up to the benefits of reform.

Sarbanes-Oxley — or Sarbox, as it’s come to be known — was passed in 2002 after scandals that led to the collapse of Enron, WorldCom and others. It has forced companies to rethink how they handle everything from their disclosure of information to shareholders to the independence of their boards.

It’s despised in many corners of corporate America. Those who complain often focus on the time and expense needed to put policies and procedures in place. Of particular hatred is Section 404, which is designed to ensure companies’ books are in order by forcing them to take on the laborious task of reviewing their internal controls.

Yahoo!: ALL BUSINESS: Sarbanes-Oxley Is a Must