The debate continues around whether SOX is driving companies away from the US market, and whether more are listing overseas because of SOX-related costs.

The latest pitch comes from the conservative US think tank, the American Enterprise Institute, which tells us that the growth of foreign securities markets is the canary in the coal mine.

It says costs, both tangible (like Section 404) and intangible (like the requirement to have audit committees composed entirely of independent directors, and the NYSE and Nasdaq forcing companies to apply that principle to the entire board) have cost the US economy up to $1.4 trillion!

Not so, says the other camp. The problem is more about the fees for listing in the US, something I have explored in more detail in a blog earlier this month.

Personally, I find both arguments are way off target. But the issue does highlight both the positives, and the enormous problems with Sarbanes-Oxley.

And it does tell us that the era of dominance that the US exchanges have enjoyed since the war is drawing to an end.

Most of the US and Australian companies I speak to tell me that the extra dollars on fees come with the territory of listing on the world's biggest capital market. It's the cost of doing business in a market where it's easier to raise sophisticated equity capital.

As for the so-called canary in the coal mine, more companies are listing on overseas exchanges because of globalisation. In any case, what's important is not where they are listing but who the hell owns the company and where the profits are going. The only ones who lose out are the brokers, lawyers, and consultants. Poor sods.

Robert D Kugel of Ventana Research in this article says the growth in overseas listings is inevitable because the increasing pools of savings in other countries is driving the growth of those markets. Put simply, there's a growing pool of money outside the US and it has to be parked somewhere. In any case, many of the largest IPOs of 2005 were once nationalized companies which means listing on local exchanges was sensible.

In other words, don't blame it all on SOX. Blame it on globalisation. Many Americans just have to get used to the fact that it's a big world out there, and it's changing.

So what does that say about the future of Sarbanes-Oxley? Kugel says it's here to stay but US politicians are unlikely to introduce anything quite like it again.

"The Sarbanes-Oxley Act of 2002 was neither a disaster nor a panacea, although the cost of complying with it has been huge. In addition, we doubt that even this will prevent the next Enron, or conversely that it was necessary for the one-fourth to one-third of larger U.S. public companies that already had sufficient financial controls in place. On the other hand, the Act was created in the wake of a series of serious financial scandals. It was passed with the belief that such legislation was needed to restore confidence in the capital markets, which it certainly did at the time. We think SOX has improved the quality and transparency of financial reporting for U.S. companies. Still, it is difficult for us to imagine that in the future sweeping securities regulations like it will occur without regard to the consequences in increasingly international capital markets; that caution will dilute the ability of the U.S. Government to dictate reporting requirements."