New York Fights Back
November 30th, 2006 by Justin
I’ve made mention of the fierce NY-London financial rivalry in a previous post. For the uninitiated, the basic argument is that restrictive laws and policies (like Sarbanes-Oxley) have caused New York to lose its edge in financial markets. Large companies looking to go public have instead turned to London and in many cases Hong Kong rather than going the traditional route of listing on the all-powerful New York Stock Exchange.
Although removing Sarbox (as Sarbanes-Oxley is affectionately called…think of it as the financial equivalent of the Tom Cruise + Katie Holmes = TomKat equation) or watering it down so that listing in the US is cheaper will take some time, New York is fighting criticism by looking to merge two of the main market regulators. The Commodity Futures Trading Commission and Securities and Exchange Commission are set to join forces. This will put futures, bonds, equities/stocks, and forex under one umbrella. This is hopefully a move toward a regulatory framework similar to London’s, which is principle-based rather than rules-based. In a second item, FT discusses another regulatory merger:
On Tuesday, in a similar move, the NASD, the biggest private-sector provider of regulatory services, and the New York Stock Exchange agreed to consolidate their member regulation operations into a single self-regulatory organisation. It signalled the biggest overhaul of securities markets regulation in decades by agreeing to create a single oversight organisation for the country’s 5,100 broker-dealers.
The regulators seem to have grown jealous of world exchanges, and decided to join the consolidation wave themselves.
