Sarbox reform: Goodbye to 'Roach Motel'

There's been a lot of hand-wringing over the competitiveness of U.S. markets lately. The conventional wisdom is that Sarbanes-Oxley has made the U.S. a much less attractive place for foreign companies to list. Some of this has been overblown. But there has long been some frustrating rules that made it hard for foreign companies to delist. Some likened the U.S. markets to the Hotel California-"you can never leave."  Others have called it a Roach Motel. The new rule allows a company to delist if it can show that average trading volume has been below 5 percent of global volume over the previous 12 months. The SEC estimates that about 30 percent of the 1,200 foreign companies qualify. The rule will take effect before Sarbox's June deadline. One commissioner says about 60 percent of European companies could leave. This might be seen as a change that will only reduce the number of foreign listees. But the thought is that--long-term--it will make the U.S. more hospitable. As for small companies, they are still waiting on relief.

For more:
- here's a Financial Times update
- European officials applauded. Article
- German companies to delist? Article