|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
Too Many Regulators For Wall Street?
Liz Moyer
Forbes.com. November 9, 2006
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EXCERPT: Are there too many securities industry regulators for a sector that seems to be shrinking by the minute? With two pending trans-Atlantic stock exchange mergers, the world's largest futures exchange forming in Chicago and rumors of more consolidation in the markets to come, there is the sense that the multiple federal securities regulators, state regulators and self-regulated entities like the NYSE Group and NASD will have to come to some sort of consensus for dealing with the shifting landscape. "In certain areas, we do not have the balance right at the moment," said John Thain, the chief executive of NYSE Group, which is close to completing its deal to acquire Euronext, the Paris-based electronic stock exchange, in a move that would create the first of two proposed U.S.-European exchanges. "If we are not careful, we will in fact make the U.S. less attractive to the rest of the world." Thain was speaking at the annual gathering of brokerage executives in Boca Raton, Fla. This year, convergence is the big theme: In fact, the Securities Industry Association and the Bond Market Association recently merged and are celebrating the conference as the launch of the combined Securities Industry and Financial Markets Association, or SIFMA. There were even plenty of jokes here about the acronym, too. Thain wasn't the only person to say it sounded like a disease. There is already evidence that U.S. markets are becoming less of the go-to place than they once were. Nine of the ten largest initial public offerings this year were listed outside the U.S., and many other companies have moved their listings from U.S. exchanges to places abroad, like London Stock Exchange's alternative investment marketplace. Sarbanes-Oxley corporate governance rules are usually the villain cited for this trend, because the stringent reporting requirements and the costs of compliance drive away many smaller companies. One of the biggest criticisms of the NYSE-Euronext merger from the European standpoint was whether these rules would be extended to European companies, even though Thain and Securities and Exchange Commission chairman Christopher Cox have repeatedly said they wouldn't. But Thain says there are more flaws in the U.S. system that threaten its competitiveness. Lack of tort reform is one, he said, adding that he is not optimistic that even a Democratic-controlled House and Senate will change that. Lack of uniform accounting standards across borders is another, he said, as is too much overlap and competition among regulators. |
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