|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
Committee on Capital Markets Regulation Recommends Enhancing Shareholder Rights and Curbing Excessive Regulation and Litigation; Interim Report Outlines 32 Recommendations in Four Key Areas to Make U.S. Markets More Competitive
Staff Writer
PR Newswire. November 30, 2006
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EXCERPT: The Committee on Capital Markets Regulation, an independent and bipartisan group comprised of 22 leaders from the investor community, business, finance, law, accounting and academia, today issued its interim report with recommendations for changes in capital markets regulation based on the twin goals of enhancing shareholders rights while reducing excessive and overly burdensome regulation and litigation. The Committee outlined 32 specific recommendations in four key areas -- shareholder rights, the regulatory process, public and private enforcement and Section 404 of the Sarbanes-Oxley Act of 2002 -- to improve the regulatory system and give U.S. capital markets the competitive boost necessary to respond to the increasingly aggressive efforts of other countries to attract equity capital markets. "Maximizing the competitiveness of U.S. capital markets is critical to ensuring economic growth, job creation, low cost of capital, innovation, entrepreneurship and a strong tax base in key areas of the country," said Glenn Hubbard, Dean of Columbia Business School and co-chairman of the Committee. "While U.S. capital markets historically have been the deepest, most liquid financial and lowest cost markets anywhere, the world is vastly different today. There are several viable markets for raising capital, and many companies now are using cost-benefit analysis -- including the potential cost of litigation and the complexity of regulation -- to focus on the competitive differences among the markets. John L. Thornton, Chairman of the Brookings Institution and co-chairman of the Committee, said, "Investor protection and shareholder rights are bedrock principles of U.S. capital markets. The Committee believes that enhancing shareholder rights and facilitating more efficient regulation will strengthen U.S. market global competitiveness." Hal S. Scott, Nomura Professor and Director of International Financial Systems at Harvard Law School and Director of the Committee, added, "The Sarbanes-Oxley Act of 2002 helped restore market confidence after several high-profile scandals. However, the cost of auditing internal controls is unnecessarily high and can be brought down. The major problem is the cost of litigation, which can be addressed by resolving legal uncertainties and giving shareholders the right to choose more efficient ways to resolve disputes with their companies. We will continue to explore these and other issues affecting the competitiveness of our capital markets for the next two years and we look forward to a lively public discussion." |
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