Back in December, I blogged on Sarbanes-Oxley turning London into the market of choice for companies going public.

The trend has continued into 2006 with the announcement from New York-based payment processor Planet Group that it plans to list in London, claiming that SOX has lifted the bar too high.

Truth is here are now only two genuine global financial centres: London and New York, according to a study commissioned by the Corporation of London. While the difference between London and New York is not statistically significant, the two have left Paris and Frankfurt well behind in the race. Don't even ask about Tokyo. And Singapore? Yeah right, Disneyland run by Nazis. Because it's managed by committee, Singapore has never had a first-mover advantage. It's not the world's most innovative market, and when it moves, it usually goes for what is nice and safe, usually something that has been done somewhere else. According to the study, if a third global player emerges it's likely to be in China, probably Shanghai.

Still, what's interesting about the study is that the regulatory environment was cited as the big component of competitiveness and BOTH London AND New York scored well in this area. That's despite all the whining that Sarbanes-Oxley is scaring away foreign companies from listing on the NYSE. Try working that one out!

Hence the news that Nasdaq has its eyes on London and the NYSE is looking at a counterbid.

So is it goodbye Manhattan? That's the question raised by The Sunday Times and Newsweek which cites a Morgan Stanley report claiming that Arab oil windfalls are flowing to London because Middle Eastern investors have trouble buying in the United States. And with oil prices stuck at around$55-to-$65-per-barrel, oil money is shaping up to be the crucial component of future deals.That can only be good news for London.

All of which creates more pressure on regulators to fix the compliance regime confronting Wall Street. But as APM's Marketplace points out, there are no easy answers here.

So is fixing the regulatory regime the answer, or are there more fundamental issues at play?