SENATOR PAUL SARBANES and Rep. Mike Oxley are both retiring from Congress at the end of this year. The business community will be delighted to see them gone–and to get on with the task of pushing through changes to the law that bears their names, and is better known as SOX. That legislation was designed to improve the quality of corporate governance in the wake of the collapse of Enron and WorldCom, and scandals at other companies.
But, say its critics, the costs of complying with the reporting and governance requirements of Section 404, exceed any benefits generated by SOX. Key legislators are complaining to Securities and Exchange Commission chairman Christopher Cox that U.S. securities exchanges are losing market share to overseas rivals because companies can avoid SOX’s burdens by doing their capital-raising beyond the statute’s reach.
