SOX Worldwide

The controversial Sarbanes-Oxley regulations have gone global. Beginning Saturday, foreign firms listing on U.S. exchanges must comply with SOX regulations if they have more than $75 million in market capitalization. This is good news for U.S. businesses and bad news for companies such as Toyota, BP, and Sony, as applying the onerous burdens of SOX Section 404 to foreign firms makes them relatively less competitive. Mandating foreign compliance also raises the risk of foreign companies delisting from the U.S. altogether.

The SEC has already gone overboard with SOX regulations, and this could prove to be the last straw for many foreign companies. If the U.S. wishes to remain a leader in world capital markets, the government should consider taking steps to attract foreign companies, not scare them away.