Hastily and clumsily drafted, Sarbanes-Oxley looks like being hit with the law of intended consequences, says former Securities and Exchange Commission chairman Harvey Pitt.

Writing in the Financial Times, Pitt warns that it could force companies all over the world to fall in line with the stringent US corporate governance regulations.

In other words, Sarbanes-Oxley could become the global de facto standard.

Pitt says that there are some positives in the legislation but the ''one-size-fits-all'' approach has created something that stifles innovation, creativity, risk-taking and competitiveness. SOX has not only diverted intial public offerings abroad but it's also encouraged the New York Stock Exchange and Nasdaq to seek offshore acquisitions.

And therein lies the problem.

"By virtue of cross-border market consolidations, Sox will become the de facto world standard of corporate regulation unless Congress acts. Why? Companies listed on US exchanges are subject to US federal securities laws. Only if consolidated US-foreign exchanges maintain separate identities for each marketplace can companies continue to list solely on a Foreign exchange and ensure that they are not subject to US regulatory standards. That is not, however, the purpose of these consolidations, which is to provide a single platform globally. Once achieved, it will be impossible for consolidated exchanges to have "A" and "B" listing standards. US exchanges cannot adopt lower standards than those required by US law. Otherwise, General Electric, IBM and many other companies listed on the NYSE would simply delist, list on a foreign exchange and claim they are no different from foreign companies that choose not to list on US markets."