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Responses to ACSPC Request for Public InputGeneral Impact of Sarbanes-Oxley ActQuestion 4. Has the current securities regulatory system, including SOX, increased or decreased the attractiveness of U.S. capital markets relative to their foreign counterparts for companies? For investors? Please explain.The following answers have been received: 08/02/2005 17:44:12 Decreased. SOX for small companies makes them less competitive as they have inherently higher compliance costs. SOX was an over reaction to a few large companies that broke the rules. Everyone else is being punished for the acts of a small minority. Capital is essential for many small companies. SOX makes it more difficult for small companies to raise equity capital to fuel growth and innovation. 08/02/2005 18:15:55 decreaed 08/02/2005 23:36:32 Perhaps for larger companies. They can more readily afford the costs and SOX may give investors more confidence. 08/03/2005 01:39:17 Without a major restructuring of 404 audits, I believe an offshore trading market will develop and firms will chose to move out of US markets. 08/03/2005 07:01:34 decreased, would you take the risk of going to prison for what some underling did that you knew nothing about? the intent is correct and justified, but the rules are too strict and controlling. loosen reghulations and continue to fight abuse. nothing like some regulation by prosecution. You have choked off talent and capital, and people are hurting as a result... 08/03/2005 08:55:04 Decreased 08/03/2005 08:58:39 This does not affect us. We are a small local community bank. 08/03/2005 10:40:26 With regard to "larger companies", I would say it has increased their attractiveness because they are investing in a more scrutinized company. Foriegn companys will run into the same problems. 08/03/2005 11:03:25 Certainly this will help give confidence back in the US markets. However, it must also be recognized that companies with low number of shareholders, no active market, and very small capitalization are bearing an inordinate share of the costs that were designed to help the actively traded companies. 08/03/2005 12:17:58 foreign markets are superior, without sox and not allowing dtcc to loan shares creating naked shorting. 08/03/2005 13:55:42 sox and the Stock borrow (naked shorts) is discouraging for everybody. 08/03/2005 15:01:40 Probably increased the value since financial reporting should be more accurate. 08/03/2005 15:22:49 Frankly, those investing in small financial companies such as our see no value in SOX since we are already heavily regulated. I honestly feel SOX was brought about by the super large comanies whose CEO's really were not doing their jobs in keeping informed on what was going on inside their companies. SOX has forced this issue. Small companies in my opion never had this problem. We CEO's of financial companies with low market capitalization are more "hands on" and are more accountable to our regualtory bodies and shareholders. 08/03/2005 18:01:35 Please look into item no 29 08/03/2005 18:05:44 With respect to smaller companies, the current regulatory system has made the US capital markets less attractive to foreign companies because of the high cost of compliance. I represent several foreign companies who originally came to the US for capital but are now looking elsewhere because of the cost of compliance with SOX. 08/03/2005 18:30:29 decreased! 08/03/2005 19:54:33 The current SEC regulatory system, including the market maker process, Cede and Company, DTCC, etc, have all contributed to the colapse of confidence from the small investor, in my opinion. I talk with many such small investors, and the attitude is "We're going to crash and burn. I've lost so much of my investment already, what little that's left won't make a bit of difference to sell now." I have heard bad things abouot the Berlin Exchange which would cause me to not invest there. But I have heard many GOOD things about the London Exchange. Once my funds have built back up (not talking about my investments which are being shorted to death), I plan to employ a broker who will permit me to trade on the London Exchange. SOX has not made the US markets attractive at all, since the SOX still permits illegal activities to occur with the small and micro-cap companies. 08/03/2005 19:55:50 INCREASED BECAUSE OF FORCED INTEGRITY BECAUSE OF SOX! 08/04/2005 09:37:56 decreased - looking at aim primarily but also toronto as alternative. this means fewer investment opportunities for small cap investors. 08/04/2005 09:39:15 Depends on the investor. The institutional investor should definently be attracted to the US markets. The individual investor is indifferent. 08/04/2005 10:40:16 The foreign counterparts now have an advantage. The cost of compliance makes a difference. 08/04/2005 12:09:05 Again, I think greater accountability is always good. However, I think SOX legislation has way too many impractical aspects that are detrimental to US companies. I think, given the great minds of our country, we could come up with a much better approach. It also needs to come from business leaders, not congress. Congress means well, but they have no practical experience to pull from. SOX is a typcial example of legislation coming from a party that is uninformed as to the details and intricate specifics of the business world...this leads to impracticality. 08/04/2005 13:38:24 No comment. My only reference would be what I read in the WSJ. 08/04/2005 14:20:27 I think they have had little or no effect. Foreign investors know as a whole the American securites market for the most part heeds regulators, even prior to SOX. 08/04/2005 18:05:44 I believe the existing system has added costs that make U.S. companies less competetive and as such makes them less attractive to investors. 08/05/2005 10:54:31 I do not think that it has changed the perception of value of US markets. 08/05/2005 12:38:34 Decreased - Because application of regulation in certain instances is transcended by politics! 08/05/2005 12:44:28 I think SOX decreases the attractiveness of US markets to the extent that the rules are unclear as to the cutoff of what constitutes a smaller company and who SOX applies to. 08/05/2005 15:34:53 Regulation and law in general only affect compliant management and boards. The type of fraud that began this latest storm of rules will still exist in companies that allow poor ethical behavoir. Tone at the Top and accountability with enforcement is what the investors need. The market can make their voice heard with their dollars. The companies needing capital from the market may look overseas to avoid the hassle. As with the river, the path of least resistance is where the flow will go. 08/05/2005 15:43:46 This question during not apply to the small bank population commented herein. 08/05/2005 16:45:38 I would say that the regulatory environment increases the attractiveness for honest investors in the United States, as the un-regulated market made for a real debacle that could have easily destroyed faith in the US markets. criminals walking free with Billions of invested dollars is no way to run an economy of trusted investment markets. If people want to invest dishonestly, then they are free to choose to do so in corrupt markets, but the risk is extreme and the possibility of losses is much higher. Foreign markets that are well-regulated and have enforcment in place are far safer investments and are more attractive to the average investor. Large investors who like to risk everything may find that boring, but it is a "sound investment" versus "irrational exuberance." 08/05/2005 19:33:08 I don't think it has any impact on investors of small companies. Small companies have high risks and therefore high potential gains. 08/06/2005 13:52:06 Decreased. Rules are oppressive, and there are increasing alternatives. 08/08/2005 11:10:11 don't know 08/08/2005 11:39:29 SOX's value to the US capital markets is mostly limted to improved PR for the SEC (somewhat important). Dishonest people will always be dishonest. Given the amount of wealth available in the US capital markets, dishonest and gready people will be attacted. All parties concerned would be better served by a higher degree of review and enforcement of current laws as opposed to more laws that only the honest are going to follow anyway. 08/08/2005 14:06:10 Do you really think that investors feel US capital markets are more attractive because of SOX 404? Our capital markets were the most secure before any of the Enron or WorldCom fiascos. Fraudulent activity doesn't occur in the US alone. The fact is that there is greater access to capital in our markets and our regulatory infrastructure was and is more stringent and secure than any other foreign markets. Therefore I believe our securites regulatory system before SOX was better than any other foreign market and I don't believe that SOX has added amything to increase the attractiveness of the system to investors. On the other hand, I don't think it has appreciably decreased the attractiveness of the system either. The big issue for companies is the cost of compliance and that is something that is a little far removed for investors. 08/08/2005 15:43:24 For companies it may have hurt for some who cannot meet the rules. For investors, it will help in the long-term. There will be a much higher confidence level that an Enron or Worldcom is much less likely to occur in the U.S. 08/08/2005 21:39:10 Any regulatory activity that increases the cost of being public will no doubt reduce the attractiveness of U.S. capital markets for small companies. Large companies are better able to absorb these costs. Small companies may be "priced out of the market". The intent of SOX is good, so investors ultimately benefit, but the unintended consequences to investors in micro-cap companies will be felt by many. 08/09/2005 09:30:31 Unable to comment relative to foreign markets. 08/09/2005 13:04:16 Decreased. Specific experience with being part of a foreign publicly traded company whom decided to delist mainly due to regulatory demands. 08/09/2005 16:26:34 If SOX is understood by the investment community, and I am not sure that the specifics of SOX 404 are understood, you would expect the U.S. market values to reflect a premium over foreign companies without the controls. Very theoretical, and frankly doubtful. 08/09/2005 17:25:10 Decreased. Why would a small company want to list in US and be subject to all this? it would only do so so if it had no other choice in raising capital. 08/10/2005 09:04:41 no comment 08/10/2005 13:44:39 Increased I would think. Overall the US markets have been stronger for some time due to closer governance. This helps both the companies and the investors. 08/10/2005 17:18:15 No impact - for smaller companies only the US markets are a viable option 08/10/2005 22:09:27 I cannot make a educated statement on this question all I know is our legal requirements are making us less competitive every year. And since most of our legislators at the federal level are lawyers and don't see nay end in sight until Americans continue to lose good paying jobs. I still think American Manufacturing is the best in the world. I ran operations in Ireland,England, Italy, Singapore and China. I also did a fair amount of business in India,Mexico,Japan,France,Holland,and Germany. We still managed to be very competitive, however with the burden of no value added costs this will continue to deteriorate earnings and soon investors so most small companies will go private which will drive investors to other opportunities and drive small business to operate in regions such as China or other Asian countries. we even considered Poland before we sold the Company. 08/11/2005 20:27:22 I have no opinion, this question would make it less attractive for smaller companies based on the cost of compliance with SOX 08/12/2005 13:12:10 It would seem that it has increased for both entities as it relates to large, high profile companies like those that caused the passing of Sarbanes-Oxley in the first place. I lost my investment in Worldcom, and I believe that SOX has a place in the regulatory agenda to help prevent the abuses in large companies like that. However, we are talking about small companies here, and smaller has always meant less. So I believe that SOX regulation should be moderated in its' application to smaller companies...and especially so in its' application to small banks where regulatory oversight is already a constant thing. 08/12/2005 14:46:45 I believe it is essential for all companies to have a strong control involvement and risk based program no matter the size. It provides a benchmark and assurance for investor. However, the potential for collusion and fraud remain unaltered. Only the continued legal actions taken by the SEC will act as a potential deterence. 08/12/2005 16:35:01 N/A to our situation. 08/12/2005 18:34:31 I believe the recent actions of the FASB are perceived to be "leveling the playing field" with foreign capital markets. I believe our securities markets are viewed with the highest respect and therefore the addition of SOX and the recent SEC enforcement action add no further crediblity to the system. They only serve to appease the individual investor who suffered through the downturn of 2000-2001 like the rest of us but believe he is entitled to some restitution, albeit through the jail term of others. 08/13/2005 12:39:43 CAN'T TELL 08/15/2005 13:08:27 Overall, the regulatory system offers significant protection to investors as compared to foreign counterparts. SOX is an exception. 08/15/2005 14:27:30 For small companies, I don't think there is a real choice and the question better applies to much larger companies. As noted above, I don't think investors care one way or the other. 08/15/2005 15:10:05 It has probably brought US companies up to par with those in Canada and Europe that already had tighter and more enhanced emphasis on internal controls. 08/15/2005 15:13:01 If a company is going to go/remain public and they are other than a small cap company, I believe they have to be registered on the NYSE or NASDAQ. As a result, while it's not attractive, it's part of the consequences of being public. 08/15/2005 15:14:45 Should have decreased it for external companies that do not need access to the US capital markets, due to additional costs of SOX compliance. 08/15/2005 16:33:43 decreased 08/15/2005 16:41:14 Right now, it must be decreased, because of the high incremental costs 08/15/2005 18:59:52 The more bursensome aspects of financial reporting and the threat of SOX 404 have diminished the attractiveness of US capital markets for Canadian companies. The cost of complying with these rules is too high and the perception is that there is no benefit for shareholders. 08/16/2005 09:51:21 Decreased 08/16/2005 10:21:17 No change. 08/16/2005 10:26:28 decreased for companies unless access to US capital markets is fundamental to success; duplication of effort (eg IFRS plus SarbOx); too much bureaucracy for investors, no real change, IFRS, UK Combined Code etc are just as good if not better than SarbOx 08/16/2005 10:27:48 This question nees to be addressed by foreign investors. Do we as a small capitalized public company have foreign investors? No. Would we ever anticipate foreign investment in our stock? No. 08/16/2005 10:42:02 Relative to the post-Enron state of the US markets, it has probably helped. Relative to where we were before a few "bad guys" and their accountants and lawyers screwed up, no benefit at all. 08/16/2005 10:44:16 Not in foreign market, so can't address. As an investor, I do not feel much more comfortable that SOX has made US companies better 08/16/2005 10:45:16 Yes, but sometimes we go overboard, as with SOX. You cannot legislate morality. 08/16/2005 11:18:54 Obviously, I believe Sox has decreased the attractiveness of the U.S. markets. that should be obvious by the number of foreign companies who have expressed interest in delisting. Also, for investors, I don't believe they pay much attention to Sox. I cite studies that have so far shown that the stock price of companies that reported Sox problems has not been affected. 08/16/2005 11:41:07 Decreased. 08/16/2005 11:52:16 We are looking at doing future financings in Canada and other off shore countries due to the heavy burdens of the new regulations. 08/16/2005 12:14:10 For companies the cost is high and decreases the attractiveness. For investors it has probably increased it somewhat as there is higher confidence in the reported results. 08/16/2005 12:15:34 I think for larger companies, it has increased investor confidence. For smaller companies, I don't think that it has helped as much. 08/16/2005 12:40:54 Not much change for a us company 08/16/2005 12:42:56 I would not recommend that any company smaller than $1b market cap consider going public on a U.S. capital market in the current SOX environment. This obviously makes the markets less attractive. 08/16/2005 13:04:14 I believe it decreases the value of U.S. companies since the cost of SOX compliance will very rarely be justified with productivity increases 08/16/2005 13:12:04 Decreased. The higher cost of doing business in the USA reduces the incentive for foreign entities to enter the US market. SOX is in effect a form of trade and investment barrier. 08/16/2005 13:19:29 Unknown 08/16/2005 13:20:23 Short term - not much impact at all. Long term, it will enhace the reputation, credibility and reliability of the US capital markets. Stronger civil/criminal penalties will also serve to reduce the number of frauds/misrepresentations that have undermined the credibility of the US Capital markets. 08/16/2005 13:25:32 I believe the US securities regulatory system, prior to SOX, was an asset in capital markets. I believe SOX has damaged that. If I were a foreign issuer, I would be hesitant to list in the US and waste shareholder assets on SOX. 08/16/2005 13:27:00 American companies were already the best regulated. SOX just further increases the regulation. I don't think it has had either a major negative or positive impact on capital markets. 08/16/2005 13:30:33 Decreased. Once again, small companies face a highly regressive tax. I understand all of the frauds committed by Worldcom and others. However, the prescription developed by the SEC to prevent these problems for large companies is not fair to small companies. 08/16/2005 14:08:05 U.S. capital markets are less attractive due to the additional costs imposed by SOX, and the increased regulatory environment. 08/16/2005 14:23:10 The current regluatory system including SOX has probably calmed investor perceptions of risk. We need to distinguish percieved risk from real risk. In addition, we need to distinguish the risk of a relatively minor accounting error misstatement from poor business performance and communication thereof. When the two risks overlap the risk of sudden unpredictable investment losses is increased. The problem with the SOX 404 is that the PCAOB and the accounting firms have applied a cook book approach to aggregrating unrelated risks such that the evaluation process is excessively expensive and does not add real value to the investors. Initially investors may percieve added value but ultimately after the increased cost of compliance is factored into lower earnings, investor value in the form of equity prices reduced. The audit or SOX 404 will not solve fundamental business problems. The insurance premium (SOX 404 compliance cost) is not proportionate with the real risk. The accounting firms and audit partners are totally focused on ensuring that the audit documentation provides a re-audit trail for the PCAOB or the firm's national office or class action lawyers do not find any evidence in their work papers that is subject to negative comments. Judgement and evaluation of business risks has taken a backseat to perfection of the audit workpapers. 08/16/2005 14:44:16 The current regulation (specifically SOX) makes the local small cap companies not attractive. The cost structure, and ability to compete with foreign companies is impacted by the additional SOX cost. 08/16/2005 15:15:12 We are a small almost isolated company, so U.S. Capital and Foreign markets are not of concern, but the cost of SOX in terms of management time and money has to far out weigh the benefits to investors of small companies. 08/16/2005 16:08:50 Our current regulatory system has decreased the attractiveness of the capital markets in the U.S. relative to foreign markets. My belief is that investors perceive SOX as a fix to the issues of WorldCom and Enron, when in fact it only it does very little to fix those issues. 08/16/2005 16:09:47 No opinion 08/16/2005 16:16:04 For larger companies yes, for smaller and start up companies, no. This retards growth and development of small companies. 08/16/2005 16:45:09 Current securities regulation is decreasing the attractiveness of the U. S. capital markets for both companies and investors. Both the U. S. and foreign markets are trying to achieve similiar objectives but the cost of the U. S. markets is so much higher than the foreign markets with no real increase in benefits. Just look at how the international markets have grown in the last 15 years as measured by U. S. investment in foreign securities. 08/16/2005 18:35:41 Decreased, for both, due to the deadweight cost as described in 3. above. 08/16/2005 19:18:56 I do not believe that the current regulatory system has increased or decreased the attractiveness of U.S. capital markets relative to their foreign counterparts. I believe SOX has been tagged as crucial to the rebuilding of confidence in the U.S. markets but I do not believe it has had much of an effect in that regard. I believe the prosecution of companies and executives of companies that perpetrate fraud have been much more influencial in rebuilding confidence in the U.S. markets. 08/16/2005 21:29:07 Unknown. 08/16/2005 21:40:38 The premise of increase compliance is offset by the mind numbing lunacy of implementation. Foreign companies aren't wasting time on this foolishness. 08/17/2005 06:57:10 To some degree, I believe it has hurt the attractiveness oft he US capital markets, especially for FPIs that could have other options of market to list. 08/17/2005 10:59:57 Generally my opinion is investors do not feel more or less secure in their investment decesions with SOX. 08/17/2005 12:28:22 Unsure, probably neutral. 08/17/2005 12:36:00 I don't think it's made a difference. 08/17/2005 12:48:33 Decreased. Too confusing. 08/17/2005 13:25:50 Had no effect because the thieves will continue to lie. Honest people dont need SOX, crooks will continue to ignore. 08/17/2005 16:18:39 For smaller companies, the attractiveness of the US capital markets has decreased because of the excessive costs required to comply with SOX. 08/17/2005 18:49:27 We have thought about a UK listing to avoid the SOX costs 08/17/2005 19:31:08 Increased regulatory scrutiny will always decrease market attractiveness. 08/17/2005 21:27:12 Unsure. 08/17/2005 22:55:14 I believe it has provided an enhanced opportunity for a foreign stock exchange which has reasonable listing standards and sufficient liquidity to attract new issues of small companies. 08/18/2005 08:03:31 It decreased the attractiveness (plse see in answer in No.1) 08/18/2005 15:26:25 Decreased. In most cases, the cost of compliance outweighs the benefits. In the most high profile fraud cases, the controls in place were circumvented by senior management, which can still take place. 08/19/2005 02:56:12 Interesting question. Probably some increased attractivness, but not significantly so. The larger issue is that investors, even those that are more sophisticated in their knowledge of finance and markets, rarely understand all the disclosures or what they mean. Simply adding more disclosures or forcing companies, via regulation or guidance, doesn't necessarilly lead to better decision making by investors. 08/19/2005 11:44:44 I don't believe I'm qualified to answer that question. 08/19/2005 12:28:03 unknown 08/19/2005 13:49:01 Because of the current securities regulatory system numerous foreign companies are taking a close look at whether or not they want to be part of the US securities market. Many have taken steps to comply with the SOX law but are reconsidering whether or not they want to continue to be in the market knowing that the SOX requirements, and the costs associated with compliance, will be ongoing. Others have already made the decision to withdraw from the US securities market. For investors, it is realized that the requirements of SOX will only reduce the amount of return possible from companies in which they invest. It is further felt that the SOX requirements will NOT eliminate the actions that it was intended to eliminate and thus the cost associated with compliance is only a negative impact on value. 08/19/2005 14:40:28 no comment 08/19/2005 14:50:07 No opinion. 08/19/2005 17:03:28 It has decreased it for companies, but possibly increased it for investors. 08/21/2005 03:34:34 I think it decreased the attractiveness of US capital markets for Israeli companies, as it became to expensive and too encumbersome to comply. European markets became more attractive to Israeli companies. 08/21/2005 04:46:26 Decreased. Please see explanation in #3. 08/21/2005 22:19:50 I don't think it has changed the way investors or companies view the US markets versus the foreign markets. I have not heard anyone use regulation as a differentiator in comparing the two. 08/22/2005 14:21:23 I am not sure but it MAY have increased the attractiveness but only due to appearance of compliance. If someone really wants to commit fraud they will still get around SOX! 08/22/2005 15:20:23 Decreased for foreign counterparts and probably neutral for investors. Foreign companies don't understand SOX and generally don't see the cost-benefit of having to comply. This makes accessing the US capital markets much less attractive. 08/22/2005 15:47:02 Decreased. Certain provisions like whistleblower are relatively painless. Others add cost but do little to improve the business. 08/22/2005 15:47:34 Judging by the Dow Jones Industrial Average and averages of the other indexes over the past two years, I would say it has not had any impact either positive or negative. 08/22/2005 17:54:28 Clearly, the US has become less attractive as a place to list shares for a foreign company. Capital is competitive and global, and the risks to a foreign company make a US listing less desirable compared to other capital markets. Moreover, it's almost impossible to delist. 08/22/2005 17:56:59 Decreased, because of burden of the cost of compliance, which for our company is high. 08/22/2005 19:27:18 Decreased. I don't think we would go public today with the high cost of being public. Independent ideas face a hgiher barrier of success. 08/22/2005 20:10:17 As this relates to small companies, we see investors shying away. 08/23/2005 00:42:38 Detracted. Clearly, most issuers would rather be in the market that does not require more regulation. For investors, foreign issuers will be more profitable as they don't have the regulatory burden. Therefore, they're more attractive. 08/23/2005 07:47:56 It decrease the attractiveness since it take more time to be profitable and cost more to be a public company 08/23/2005 15:56:30 I don't know 08/23/2005 16:49:34 I am not sure about this. Very possibly it could have had a negative impact although it should have been a positive one. 08/23/2005 18:10:00 Not sure 08/23/2005 21:11:03 The US public company market already carried a regulatory burden higher than most western countries. Introduction of SOX added about $1MM to the cost of being a public company. SOX, coupled with the increasingly confusing regulatory and compliance climate gives non-US companies pause before committing the resources towards becoming a US public company 08/24/2005 10:14:02 Decreased. Companies are tied into a regulatory compliance knot..the cost of which consumes company profits, reduces returns to shareholders, increases the risks of exposure to CEO's/CFO's and all without a commensurate return in benefit or secirty to the shareholder. 08/24/2005 11:28:21 It has clearly decreased the attractiveness of US capital markets. This is evidenced by the increasing number of public companies that are going private, the decrease in the number of new IPOs coming to market over the past several years and the number of US operating entities that are listing on the TSX in Canada. I personally have spent a significant amount of time evaluating the IPO market in Canada and feel that it offers a very viable alternative to the US capital markets in terms of valuation, on-going compliance costs, and time to market. 08/24/2005 14:30:13 Decreased compared to foreign. It appears that a lot of investors are sitting on the sidelines waiting to see what the fall out of SOX is. Many are investing overseas as a result. 08/24/2005 16:19:27 Decreased. SOX is killing our auditors. Instead of learning about a company and accounting the first year their busy getting coffee, making copies, and doing tests of millions of immaterial transactions. 08/24/2005 16:26:56 It is likely that the attractiveness of US capital markets has decreased relative to foreign counterparts, as we believe the higher cost of compliance and the distraction of management outweigh the potential benefits that may be achieved through recent changes. 08/24/2005 16:54:47 Possibly improved a bit but not sure 08/24/2005 20:16:09 It has decreased. We need better definitions within the regulatory system for small, medium, and large companies especially in the arena of regulatory compliance and reporting. 08/25/2005 13:39:06 Neutral 08/25/2005 15:23:41 Enhanced the value due to the reliability of having full and fair disclosure and the assurance that the financials are truthful and factual. 08/25/2005 16:04:36 Increased. 08/25/2005 17:02:43 I don't believe we are able to answer the question yet. 08/26/2005 12:41:42 Today, Synthetech would not go public on a US exchange, we would consider the London or some other exchange. As an individual investor, SOX has not done anything for me. I view SOX as an over reaction to management level fraud. 08/26/2005 13:07:22 No Comment 08/26/2005 15:10:01 Increased for very large companies that don't already have controls in place. Decreased for SMB or for large companies that already have controls in place. Investors would want to ensure controls are in place for large companies, especially if they have or are considering a large investment. The typical investment amount for SMB does not warrant the larger expense for the extra controls. 08/26/2005 15:31:29 The attractiveness of U.S. markets should have increased due to the increased reliability of their financials. 08/26/2005 16:22:08 There is an element of risk added to investing in the U.S.Capital markets because of SOX. This comes from such tight rules there is a risk of a "material weakness" when there is not an economic impact on the company. 08/26/2005 17:46:13 The attractivenss of te IS capital markets has decreased relative to their foreign counterparts. In fact, small companies cannot afford to go public in the US and are considerting other markets. 08/26/2005 19:53:54 There will not be any impact as US stocks are still perceived to be more stable and valuable, even when considering the corporate scandals. SOX does not impact this to any appreciable amount. 08/27/2005 11:21:03 For smaller companies, neither. Again, compliance costs are way up, but no value is added because the quality of reporting hasn't and won't improve. 08/28/2005 23:37:43 SOX has increased the safety factor, particularly in the financial services sector, which is alrfeady heavlily regulated. 08/29/2005 07:07:37 Somewhat increased, but only for large companies. 08/29/2005 10:21:15 We do not operate in foreign environments, so we cannot knowledgeably comment on this question. 08/29/2005 10:21:25 We do not operate in foreign environments, so we cannot knowledgeably comment on this question. 08/29/2005 11:21:29 In terms of confidence in controls, it has increased the attractiveness, in terms of efficiency the attractiveness is suffering. Ensuring key controls are in place is good. Documenting every single action a person takes in your company because indirectly it has a miniscule affect on you balance sheet is not the path we should be travelling. 08/29/2005 14:18:47 Again, decreased attractiveness of the U.S. capital markets to foreign firms is a phenomenon that has been discussed widely in the press. I don´t believe that it is as widespread as it might sound. I think the capital markets in the United States are still broad enough and rich enough to make foreign firms - and small firms as well - want to be participants even if there is an added cost to doing so. 08/29/2005 15:31:21 No opinion 08/29/2005 16:10:53 I think it is possible to argue both points of view. Some would say that because of the increased review required by SOX 404c that US companies are better investments and more secure. By the way that was true before SOX 404c, except for Enron and Worldcom. So for 98% of the companies in the US that have always tried to run their activities properly, how is the substantially increased level of costs justified? This is a classic case of over reaction and one size fits all mentality. 08/29/2005 16:20:53 N/A 08/29/2005 17:12:26 I think most would say it has been a drag on the US companies competitiveness. However, some might also argue that investors have appreciated the tighening up of internal controls over financial reporting. May still be some overkill brought about by the necessary weeding out of the "bad apples". I am hopefull that a resonable balance can be acertained. 08/29/2005 17:12:43 These are real costs paid for by real cash, just as any inputs to an organization. Because of this, I think going where inputs are cheaper will always be attractive. 08/29/2005 17:36:32 I think the reaction is mixed. We now have interest from foreign investors. Larger companies may be favorably impacted 08/29/2005 19:02:32 For a small company such as ourselves it has damaged the attractiveness of the company as opposed to one without the expense. 08/29/2005 21:00:01 Overall, I would say there should be an increase in the attractiveness of U.S. capital markets. From a regulatory system perspective, we are much more regulated and therefore safer investments than other countries. 08/30/2005 15:04:16 While SOX does offer the potential for companies to "improve" their business controls/practices, the majority of foreign investors will consider the burden and increased cost - a negative. All things being equal, the investor dollar will go to India, China or somewhere else. 08/30/2005 15:07:00 I believe it may scare off investors in the short term and decreased the attractiveness of US capital markets. The number of companies reporting material weaknesses would certainly deter investors. And further, the expense/cash impact of SOX and the ongoing assumption of continued high costs to support the SOX maintenance is a deterrent. 08/30/2005 16:27:18 I believe it has had little impact. 08/30/2005 17:08:46 Smaller companies usually do not participate in foreign capital markets. So the current securities regulatory system probably has not had an impact. 08/30/2005 18:26:14 N/A 08/30/2005 18:48:02 For companies: a smaller foreign company would likely postpone going onto a US market until it is larger and can better absorb the cost of SOX, just like a smaller US company would. For investors: a foreign investor might have more confidence in the US market with SOX than it would if no attempt at all had been made to remedy reporting abuses. 08/30/2005 18:51:48 We believe that the additional costs associated with the implementation and maintenance of the new regulations would decrease the attractiveness of the U.S. capital markets in relation to the other markets that do not have to incur these costs. Although certain investors may perceive a value in additional controls, we do not believe that they would be willing to accept lower returns on their investments in order to have these controls. 08/30/2005 19:47:16 Decreased, definitely. We have personally seen the London Exchange attracting small U.S. Companies to go public in the U.K. rather than here in the last couple of years. The "carrot" the foreign exchanges hold out to the U.S. companies is a "no SOX" regulatory framework. It is hard for us to understand why we benefit from a system that chases our own entrepreneurs abroad. Sophisticated investors see the expenses related to SOX as an inefficient use of funds and look elsewhere for better returns. 08/30/2005 21:07:56 Decreased - funds and internal resources are distracted from core business. 08/30/2005 21:39:41 We believe that the current regulatory system has decreased the attractiveness of U.S. markets given rising costs of compliance. 08/30/2005 23:57:28 It decreases the attractiveness of US capital markets. Many comapanies are seeking for foreign listing like Singapore and UK. 08/31/2005 08:31:59 Decreased. Foreign corporations do not have to bear the costs of SOX. Those costs impact the bottom line and the cash available to pay back debt and equity investors. 08/31/2005 09:09:25 Less attractive--too many requirements for companies. Cheaper to list abroad! 08/31/2005 10:19:14 The current securities regs and SOX have increased the the attractivenes of US capital markets for investors and in turn for companioes receiving such investment. However the real problem resides with the fact that the Boards of large public companies to not represent the shareholders interest but are aligned with executive management. Executive management compensation in the US is out of control compared to foreign executives, which has a direct impact on shareholder value. Now the cost of policing public company management is now being incurred by shareholders as well. 08/31/2005 10:21:37 Increased attractiveness as risk is mitigated. 08/31/2005 14:00:16 I would not expect our capital markets to be as attractive to foreign companies given the increase in regulation. Why subject yourself to the additional regulation added on as a result of SOX if you don't have to? 08/31/2005 14:12:37 For the reasons noted above, we believe that the current regulatory system has decreased the attractiveness of the U.S. capital markets. However, at this point we do not believe many small companies are considering foreign capital markets as an alternative. Rather, as noted in #1, we believe small companies are re-considering their decisions to become or remain a U.S. public company. 08/31/2005 14:23:48 Decreased for both. A lot of expense for no real improvement in the business or production. 08/31/2005 14:25:37 I don't think SEC or SOX has helped the market sructure. We are too worried about foreign counter parts. A strong economy,a good product and good US company capital are the things that help our market. 08/31/2005 14:32:46 Unsure. 08/31/2005 16:05:33 I think it gives US companies an unfair advantage in the world marketplace. US companies are required to disclose everyting which may not be the case for foreign companies. 08/31/2005 16:13:45 The regulatory burden has decreased the attractiveness of U.S. capital markets. 08/31/2005 16:16:33 No comment. 08/31/2005 17:16:33 Decreased. While transparency has improved in the US,foreign companies have an advantage because they don't have the regulatory costs associated with SOX. 08/31/2005 17:57:10 Decreased for companies due to the additional significant cost involved. 08/31/2005 18:22:30 Foreign companies may be less likely to be offering to acquire a US public company because of increased compliance costs. 08/31/2005 18:23:08 Decreased the attractiveness – primarily because the excessive cost and resources needed for regulatory compliance. The cost exceeds the actual value derived. 08/31/2005 19:16:05 4. For the company there is very little value in remaining a listed company. Increasing regulatory oversight and tighter exchange listing rules are seriously threatening our ability to remain listed and maintain the opportunity to raise capital. For the investor, SOX will do significant damage if we cannot maintain a listing on a viable market since both value and liquidity will be lost by our investors. 08/31/2005 20:55:07 As a result of these regulations, USA companies are required to spend a lot of time looking inward and spending oollars to the detriment of their bottom lines. Not only does this lower the stock performance but causes an unfair competitve landscape for USA companies.This has to be less attractive from an investment point of view. 09/01/2005 14:30:54 US standards for financial reporting by public companies have always been the model for the rest of the world. SOX attempts to fix something that was not broken. Not enough thoughtful analysis went into dealing with the immutable law of unintended consequences before this legislation was imposed on small companies. Investors have gained little in the way of useful information but have lost much in the way managements now behave to protect themselves from the consequences of inadvertent mistakes. 09/01/2005 17:12:34 Decreased the attractiveness for companies due to the administration of SOX. Increased it for investors in big cap companies due to increased confidence in the numberrs and disclosures. However, may have decreased attractiveness for small cap companies due to the burden of SOX. As Company that has $60 million in revenue and several international locations our audit fees may approach $1 million in the first year of compliance and our implementation could be between $600k and $1M. Those costs could represent 3% of sales. That price is too high. 09/04/2005 07:42:16 Yes. Current securities regulatory system decreased the attractiveness of U.S. capital markets since requirements are much tougher. For smaller Companies the benefits of tougher regulations are not always cost effective.
http://www.sec.gov/info/smallbus/acspc/acspc_rpc4.htm
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