The US will lose its place as the world's leading financial center in the next decade without legal and regulatory changes, a report commissioned by New York Mayor Michael Bloomberg and Senator Charles Schumer has found.
The study suggests that some non-US firms be exempt from the Sarbanes-Oxley corporate governance regulations. The findings are based on interviews with 50 chief executive officers and business leaders as well as a survey of 305 financial-services executives.
The Bloomberg-Schumer recommendations are the latest volley from business groups and politicians seeking to ease the US regulatory framework on concern that it is eroding the country's competitive advantage.
US Treasury Secretary Henry Paulson, NYSE Group Inc CEO John Thain and the US Chamber of Commerce have made similar statements in the last six months.
"Unless we take corrective steps, and soon, we're going to see America's leadership in global financial transactions dwindle, putting a chill on the nation's economy," Bloomberg said on Monday during a press conference in New York.
The report calls for "greater clarity and balance to what is now a burdensome and inflexible system of government regulation and enforcement," he said.
Bloomberg, a Republican, and Schumer, a Democrat, said efforts to make Sarbanes-Oxley less onerous should go beyond recent changes recommended by the Securities and Exchange Commission (SEC). The New York politicians suggested that small companies be permitted to "opt out" of provisions of the law as long as they disclose it to shareholders and foreign firms be exempt from certain Sarbanes-Oxley requirements.
The Bloomberg-Schumer study, conducted by New York consulting firm McKinsey & Co, didn't provide a definition of small companies. In rulemaking documents, the SEC has defined small companies as those with less than US$75 million in shares available to the public.
Separately, a survey by the Bank of England and the US Federal Reserve showed that London extended its lead over New York as the world's leading market for currency trading last year, with a six-month average daily trading of US$1.06 trillion, compared with US$534 billion in New York.
The Bloomberg-Schumer report "starts from a mistaken premise and reaches an erroneous conclusion," said Barbara Roper, director of investment programs for the Consumer Federation of America. "Investors come to our markets because we protect capital better than any other market in the world. If you start eroding those protections, you erode our best basis for competing."
Roper was among those interviewed for the study.
The SEC and the Public Company Accounting Oversight Board, trying to make audits less burdensome and costly, recommended last month that companies and accounting firms only focus on items most likely to cause a restatement. The SEC opposes exempting companies from Sarbanes-Oxley.
"We look forward to reviewing the report and its recommendations," SEC spokesman John Nester said.
Critics blame Sarbanes-Oxley, passed in 2002, for the decline in public share sales and pushing companies away from US markets. The US accounted for 20 percent of all IPOs last year, down from 35 percent in 2001, according to the Financial Services Forum, which represents the country's largest banks and insurers.
Companies will spend US$6 billion this year complying with the rules, according to a study by Boston-based AMR Research released last March. The Business Roundtable, which represents executives from the US's biggest companies, says 40 percent of its members will spend at least US$10 million complying with Sarbanes-Oxley.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS