Editing Sarbanes–Oxley Act (section)

===Effects on exchange listing choice of non-American companies===
Some have asserted that Sarbanes–Oxley legislation has helped displace business from New York to London, where the [[Financial Conduct Authority]] regulates the financial sector with a lighter touch. In the UK, the non-statutory Combined Code of Corporate Governance plays a somewhat similar role to SOX. See Howell E. Jackson & Mark J. Roe, "Public Enforcement of Securities Laws: Preliminary Evidence" (Working Paper January 16, 2007). London based [[Alternative Investment Market]] claims that its spectacular growth in listings almost entirely coincided with the Sarbanes–Oxley legislation. In December 2006, [[Michael Bloomberg]], New York's mayor, and [[Chuck Schumer]], U.S. senator from New York, expressed their concern.<ref>{{cite web|url=https://www.senate.gov/~schumer/SchumerWebsite/pressroom/special_reports/2007/NY_REPORT+_FINAL.pdf|title=Sustaining New York's and the US' Global Financial Services Leadership|website=Senate.gov|archive-url=https://web.archive.org/web/20070202205743/https://www.senate.gov/~schumer/SchumerWebsite/pressroom/special_reports/2007/NY_REPORT%20_FINAL.pdf|archive-date=February 2, 2007}}</ref>

The Sarbanes–Oxley Act's effect on non-U.S. companies cross-listed in the U.S. is different on firms from [[Developed country|developed]] and well regulated countries than on firms from less developed countries according to Kate Litvak.<ref>{{cite SSRN|ssrn=876624|title=The Effect of the Sarbanes–Oxley Act on Non-U.S. Companies Cross-Listed in the U.S. by Kate Litvak|date=January 20, 2006}}</ref> Companies from badly regulated countries see benefits that are higher than the costs from better credit ratings by complying to regulations in a highly regulated country (USA), but companies from developed countries only incur the costs, since transparency is adequate in their home countries as well. On the other hand, the benefit of better credit rating also comes with listing on other stock exchanges such as the [[London Stock Exchange]].

Piotroski and Srinivasan (2008) examine a comprehensive sample of international companies that list onto U.S. and U.K. stock exchanges before and after the enactment of the Act in 2002. Using a sample of all listing events onto U.S. and U.K. exchanges from 1995 to 2006, they find that the listing preferences of large foreign firms choosing between U.S. exchanges and the LSE's Main Market did not change following SOX. In contrast, they find that the likelihood of a U.S. listing among small foreign firms choosing between the Nasdaq and LSE's Alternative Investment Market decreased following SOX. The negative effect among small firms is consistent with these companies being less able to absorb the incremental costs associated with SOX compliance. The screening of smaller firms with weaker governance attributes from U.S. exchanges is consistent with the heightened governance costs imposed by the Act increasing the bonding-related benefits of a U.S. listing.<ref name="ssrn.com">{{cite SSRN|last1=Piotroski|first1=Joseph D.|last2=Srinivasan|first2=Suraj|title=Regulation and Bonding: The Sarbanes–Oxley Act and the Flow of International Listings|date=January 2008|ssrn=956987}}</ref>