Four years after the Sarbanes-Oxley Act was introduced it has become increasingly apparent that in its aim to protect investors from the Enrons, WorldComs and Adelphias, Sox has unintentionally created an environment that discourages smaller, innovative companies from accessing US capital markets and impedes the ability of US exchanges to compete against foreign exchanges.
I am not in favour of dismantling Sox. The intent of this regulation is laudable. There is value in having legislation that protects the investing public from corporate malfeasance. I do not believe the model of having investment banks monitor their clients, often the case in the UK, effectively protects investor interests. I support a tough regulatory environment that allows competition to thrive.
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