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Telekom Austria, Vernalis Plan to Delist From U.S. Exchanges

European companies are already signaling their intent to take advantage of a pending change in rules that will let them easily cancel U.S. stock listings and escape the regulatory constraints of the Securities and Exchange Commission and the Sarbanes-Oxley Act.

Telekom Austria AG and Vernalis PLC, a small Great Britain-based pharmaceuticals company, Tuesday said they plan to delist and deregister from U.S. markets when the rules change on June 4, saying the cost of listing outweighs any benefit. Earlier this month, European staffing giant Adecco SA announced similar plans.

Telekom Austria is listed on the New York Stock Exchange; Vernalis trades on Nasdaq. Both also trade in their respective home countries.

The moves come as U.S. financial officials, including Treasury Secretary Henry Paulson, grapple with what they see as the shrinking competitiveness of U.S. financial markets. Other stock exchanges, particularly in London and Hong Kong, are winning initial public offerings that previously might have gone to the NYSE or Nasdaq.

Yahoo!Finance: European Cos. Exit U.S. Exchanges

Treasury Secretary Henry Paulson said Tuesday a balance must be struck between ensuring the competitiveness of financial markets and protecting investors.

Paulson addressed a gathering of top business leaders and former government officials. The conference followed months of campaigning by American business for an easing of laws and regulations established after the Enron debacle.

Paulson said the laws and regulations have been, ‘’extensive and significant, so it is quite naturally taking time for companies to understand, process and implement the new rules and requirements.'’

However, he said, ‘’the principles behind them have been positive, as have many of the results.'’

Panelists included billionaire investor Warren Buffett, General Electric Co. Chairman Jeffrey Immelt, brokerage founder and CEO Charles Schwab, former Federal Reserve Chairman Alan Greenspan and New York Mayor Michael Bloomberg. Paulson and Christopher Cox, the chairman of the Securities and Exchange Commission, are serving as moderators.

NYT: Paulson Addresses Top Business Leaders

Despite professions of independence, the Committee on Capital Markets Regulation has been accused of being sympathetic to the Bush Administration.

To anyone who has ever grumbled about shareholder lawsuits or Sarbanes-Oxley, last fall’s debut of the Committee on Capital Markets Regulation should have been welcome. Comprising 22 members from the worlds of business, law, and academia, the CCMR announced that it would examine the effects of regulations on the competitiveness of U.S. capital markets. But both the committee and its first report, released in November, have come in for criticism.

For one, the committee has been accused of being sympathetic to the Bush Administration, despite professions of independence. Critics note that Treasury secretary Henry Paulson publicly praised the committee’s efforts, and that one of its co-chairs, John L. Thornton, was a top executive at Goldman Sachs during Paulson’s tenure there. Meanwhile, the other co-chair, Columbia Business School dean R. Glenn Hubbard, was formerly chairman of President Bush’s Council of Economic Advisers.

CFO.com: Reform Effort Rebuked

Finance chiefs of the world’s seven richest nations agreed over the weekend to look at ways to cut back on overlapping regulations for companies doing business internationally while at the same time recognizing each nation’s unique rules and standards.

The agreement by the finance ministers and central bank governors of the G7 to try to harmonize their regulatory regimes and ease trade in securities across their borders appeared to be the latest attempt by policymakers to take a hard look at regulatory burdens on companies and markets.

In separate remarks to reporters, the Wall Street Journal reported, U.S. Treasury Secretary Henry Paulson said he and his international counterparts are exploring ways to reduce overlapping financial regulations and standards that burden companies operating in the global market.

Regulations including accounting standards mandated by the Sarbanes-Oxley Act of 2002 have come under heavy fire by businesses and some lawmakers who say the rules are driving up the cost of doing business and making the U.S. less competitive.

MarketWatch: G7 takes aim at overlapping regulatory burdens

Parts of the landmark 2002 Sarbanes-Oxley corporate governance law should be implemented in different ways to save businesses money and time, U.S. Treasury Secretary Henry Paulson said in a speech Monday.

In prepared remarks to the Economic Club of New York, Paulson said a new law to amend the controversial act is not needed, but he acknowledged the impact its accounting provisions, in particular, are having on businesses large and small.

“We need to implement the law in ways that better balance the benefits of the legislation with the very significant costs that it imposes, especially on small businesses,” Paulson said.

Paulson singled out section 404 of the act, which has long drawn complaints from businesses for being costly and time-consuming. It requires management to sign off on the effectiveness of a company’s internal financial controls and requires an auditor’s attestation.

“Section 404 should be implemented in a more efficient and cost effective manner,” Paulson said.

The Securities and Exchange Commission will seek comments about a new auditing standard soon, Paulson said.

Morningstar: Paulson Calls For Some Sarbanes-Oxley Changes