The report from the Paulson committee on capital markets regulation hit the streets today. It'll take some time to get through all 135 page sof the report, but fortunately Columbia Business School dean Glenn Hubbard and former Goldman Sachs president John Thornton have issued an executive summary of sorts on the editorial page of the Wall Street Journal.
The gist of the thing can be found in the second to last paragraph:
Effective regulation requires economic analysis. While there are existing mechanisms at the SEC for applying cost-benefit analysis to proposed rules and regulations, we believe more can be done in this regard to assure that regulations are achieving the intended effects of investor protection at a cost that is sensible in the context of individual firms, the markets at large, and the economy as a whole. The SEC and self-regulatory organizations need to engage in a more risk-based process, focused explicitly on the economic costs and benefits of regulation (as is the case for the FSA in the United Kingdom) for companies and investors, while strengthening shareholder protections. In weighing the costs and benefits of new rules, regulators should assess and rely on empirical evidence to the extent possible.
Action Plan for Capital Markets [Wall Street Journal]
Posted by IPOs see strongest month in US in five years , Dec 01, 2006 1:17PM
IPOs see strongest month in US in five years
November was the best month for initial public offerings on US stock markets for more than five years, with 32 companies from around the world raising a combined $8bn, according to figures from the data provider Dealogic.
The strong showing testifies to the health of the US capital-raising environment, in spite of recent fears that over-regulation was hurting the competitiveness of US capital markets.
Last month was the best November for US stock market floats since 1999 and the best single month since June 2001 when 15 deals were priced, raising $14.3bn. For the year so far, deal volume is up by 19 per cent on last year. Of the top 10 US offerings last month, three were by overseas companies – Aercap Holdings from the Netherlands, Grupo Aeroportuario del Centro Norte from Mexico and North American Energy Partners from Canada. The flotations by overseas groups suggest the recent measures by US markets to stem the flow of listings business overseas may be starting to pay off.
By far the strongest debut came from Nymex, the commodities exchange, which soared by 125 per cent on its first day of trading two weeks ago. Last year, the NYSE attracted 192 new listings, while Nasdaq, its closest US competitor, drew 126.
The London Stock Exchange attracted 617 new listings but 510 of these were on Aim, its small-cap market, which has become the venue of choice, particularly for Russian groups.
Many companies have cited concerns over the Sarbanes-Oxley corporate governance legislation and the prospect of shareholder litigation as a reason for not listing in the US.
US capital markets executives have been lobbying aggressively to get some parts of the law relaxed. Analysts expect they may soon get their way.
The influential committee on capital markets regulation – chaired by Glenn Hubbard, a former economic adviser to President George W. Bush, and John Thornton, former president of Goldman Sachs – called this week for the exclusion of small companies from some of the more demanding provisions of Sarbanes-Oxley.
Last month was also the biggest for US mergers since January 2000, according to Thomson Financial. In total, 679 M&A deals worth a combined $198.7bn were announced in November.
Copyright 2006 Financial Times
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